Farell is a member of sierra vista llc. although sierra vista is involved in a number of different business ventures, it is not currently involved in real estate either as an investor or as a developer. on january 1, year 1, farell has a $100,000 tax basis in his llc interest that includes his $90,000 share of sierra vista’s general debt obligations. by the end of the year, farell’s share of sierra vista’s general debt obligations has increased to $100,000. because of the time he spends in other endeavors, farell does not materially participate in sierra vista. his share of the sierra vista losses for year 1 is $120,000. as a partner in the riverwoods partnership, he also has year 1, schedule k-1 passive income of $5,000. farell is single and has no other sources of business income or loss. (leave no answer blank. enter zero if applicable.) a-1. determine how much of the sierra vista loss farell will currently be able to deduct on his tax return for year 1. a-2. list the losses suspended due to tax-basis, at-risk, and passive activity loss limitations.

He taylor company sells music systems. each music system costs the company $100 and will be sold to the public for $250. in year one, the company sells 100 gift cards to customers for $250 each ($25,000 in total). these cards are valid for just one year, and company officials expect them to all be redeemed. in year two, only 96 of the cards are returned. what amount of net income does the company report for year two in connection with these cards? a. $15,000b. $15,400c. $15,500d. $15,800

Instructions: use the following information to construct the 2000 balance sheet and income statement for carolina business machines. round all numbers to the nearest whole dollar. all numbers are in thousands of dollars. be sure to read the whole problem before you jump in and get started. at the end of 1999 the firm had $43,000 in gross fixed assets. in 2000 they purchased an additional $14,000 of fixed asset equipment. accumulated depreciation at the end of 1999 was $21,000. the depreciation expense in 2000 is $4,620. at the end of 2000 the firm had $3,000 in cash and $3,000 in accounts payable. in 2000 the firm extended a total of $9,000 in credit to a number of their customers in the form of accounts receivable. the firm generated $60,000 in sales revenue in 2000. their cost of goods sold was 60 percent of sales. they also incurred salaries and wages expense of $10,000. to date the firm has $1,000 in accrued salaries and wages. they borrowed $10,000 from their local bank to finance the $15,000 in inventory they now have on hand. the firm also has $7,120 invested in marketable securities. the firm currently has $20,000 in long-term debt outstanding and paid $2,000 in interest on their outstanding debt. over the firm's life, shareholders have put up $30,000. eighty percent of the shareholder's funds are in the form of retained earnings. the par value per share of carolina business machines stock is

Kelso electric is debating between a leveraged and an unleveraged capital structure. the all equity capital structure would consist of 40,000 shares of stock. the debt and equity option would consist of 25,000 shares of stock plus $280,000 of debt with an interest rate of 7 percent. what is the break-even level of earnings before interest and taxes between these two options?