Rob and Lori purchased a home for $350,000 with an additional $5,000 in related purchase costs and then added a garage at a cost of $25,000. They sold the home for $450,000 and paid $28,000 in selling costs. How much was the gain on the sale of their home

Profit = $42,000

Explanation:

Given:

House price = $350,000

Additional price = $5,000

Garage value = $25,000

Selling price = $450,000

Selling cost = $28,000

Total cost of the Assets

Purchase Home $350,000

Add: Additional Purchase $5,000

Add: Purchase of Garage $25,000

Total cost of the Assets $380,000

Profit = Sale Price - (Cost Price + Selling Cost)

Profit = $450,000 - ($380,000 + $28,000)

Profit = $450,000 - $408,000

Profit = $42,000