Question

Reggie and Bebe own an apartment building in Portland, Oregon, with 8 identical units. They live in one and rent the remaining units. Their rental income for the year was $45,000. They incurred the following expenses for the entire building: Advertising for available units $ 850 Maintenance 9,000 Repairs 7,500 Utilities 12,000 Depreciation 8,000 What amount of net income should Reggie and Bebe report for the current year for this

Answer 1

$12,213

Step-by-step explanation:

Calculation to determine What amount of net income should Reggie and Bebe report for the current year for this

NET INCOME

Rental Income $45,000

Advertising for available units $850

Maintenance $7,875

($9,000*7/8)

Repairs $6,562.5

($7,500*7/8)

Utilities $10,500

($12,000*7/8)

Depreciation $7,000

($8,000*7/8)

Net Rental Income $12,213

Therefore the amount of net income that should Reggie and Bebe should report for the current year is $12,213