7. (TCO I) In October of 2011, Mike and Cathy Bennett sold their res.pdf

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7. (TCO I) In October of 2011, Mike and Cathy Bennett sold their residence for $550,000. They purchased it in 2000 for $300,000. They made major capital improvements during their 10-year ownership, which totaled $50,000. What is their recognized gain? $200,000 $250,000 $0 $550,000 Solution The recognised gain of Mike and Cathy Benett on the sale of property = Sale Value - Purchase Value - Value of Improvements = $ 550,000 - $ 300,000 - $ 50,000 = $ 200,000..

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7. BIC was organized on January 2, 2012, with 100,000 authorized shares of $10 par value common stock. During 2012, BIC had the following capital transactions. January 5 – issued 75,000 shares at $14 per share December 27 – purchased 5,000 shares at $11 per share BIC used the par value method to record the purchase of the treasury shares. What would be the balance in the contribute capital from treasury stock account at December 31, 2012. Use the lines below to record the transactions. a. $0 b. $5,000 c. $15,000 d. $20,000 Solution Balance in the treasury stock account will be 5000*1 i.e 5000.

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7-7. In 1895 an Italian criminologist, Cesare Lombroso, proposed that blood pressure be used to test for truthfulness. In the 1930s, William Marston added the measurements of respiration and perspiration to the process, built a machine to do the measuring, and called his invention the polygraph or lie detector. Today, the federal courts will not consider polygraph results as evidence, but nearly half the state courts do permit polygraph tests under certain circumstances. In addition, its use in screening job applicants is on the rise. Physicians Michael Phillips, Allan Brett, and John Beary subjected the polygraph to the same careful testing given to medical diagnostic tests. They found that if 1,000 people were subjected to the polygraph and 500 told the truth and 500 lied, the polygraph would indicate that approximately 185 of the truth-tellers were liars and that approximately 120 of the liars were truth-tellers ( Solution Type I Error=\"claiming that the person is liar when in fact s/he is a truth-teller\" Type II Error=\"claiming that the person is a truth-teller when in fact s/he is a liar\".

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