Register
Pozzi Company, a cash basis business, received $16,930 cash as payment on a loan Pozzi made to a business associate two years ago. The payment consisted of a $15,000 principal payment and $1,930 interest.
174,328 views
20 votes
20 votes
Pozzi Company, a cash basis business, received $16,930 cash as payment on a loan Pozzi made to a business associate two years ago. The payment consisted of a $15,000 principal payment and $1,930 interest. On receipt of the cash, Pozzi recognizes: Group of answer choices $1,930 taxable income. $16,930 taxable income. No taxable income. $15,000 taxable income.

User Crgarridos
by
2.6k points

1 Answer

21 votes
21 votes

Answer:

$1,930 taxable income

Step-by-step explanation:

Based on the information given On receipt of the cash, Pozzi recognizes the amount of $1,930 TAXABLE INCOME which is the INTEREST amount ($16,930-$15,000) reason been that we were told that the Company received the amount of $16,930 cash payment in which the payment consisted principal payment amount of $15,000 as well as an interest amount of $1,930 interest.

Therefore On receipt of the cash, Pozzi recognizes $1,930 taxable income.

User Freshblood
by
3.2k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

1.6m questions

2.0m answers

Other Questions

If the rate of inflation in Japan dramatically increases while the rate of inflation in the United States remains constant, then a. the demand curve for dollars shifts to the left. b. the demand curve
If you buy a one-year bond for $4,000 and the issuer pays you back $5,000 at the end of one year, the interest rate on the bond is
Kylie is risk averse and has $1,000 with which to make a financial investment. She has three options. Option A is a risk-free government bond that pays 5 percent interest each year for two years. Option
Elroy Rocket is entering his senior year as an accounting major and has a number of options for his summer break. His options for the 3 month break follow: (1) Work full time at a local accounting firm
In January of the current year, Dora made a gift of stock to her granddaughter. At the time of the gift, the stock was worth $15,000. Several months later in the same year after the gift, a $500 dividend
Link Copied!