Question - Gregory Mcdonald sold a piece of land he purchased for $5,000 many years ago. he recently mortgaged the property for $30,000, but after six months he sold the land for $50,000 to his cousin, gus.
a. If gus purchased the land for cash and gregory paid off the mortgage, what is the contract price, gross profit, and gross profit %?
b. If gus took the land subject to the mortgage and paid $5,000 a year plus 10% interest for 4 years, starting with year of sale, what is contract price and the gain in the year of sale?