Gupta Company made the following sales of capital assets this year. Tax BasisSale PriceAsset 1$60,000 $47,800 Asset 2 112,500 116,000 Asset 3 13,000 22,400 What is the effect of the three sales on Gupta's taxable income?
A. $12,900 increase
B. No effect
C. $700 increase
D. None of the choices are correct
Answer: C
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General-line wholesalers are wholesalers that
A. carry a wide variety of nonperishable items. B. carry a narrower line of merchandise than general merchandise wholesalers. C. provide only some wholesaling functions. D. carry a very narrow range of products and offer more information and service than other service wholesalers. E. operate like service wholesalers except that the customer must pay cash.
The discount rate used in net present value calculations is the company's minimum rate of return
Indicate whether the statement is true or false
Cost behavior is defined as the manner in which costs respond to changes in volume or activity
Indicate whether the statement is true or false
Consider the after-tax cash flows for Project S and Project L:
Project S Project L Year 1 $3000 0 Year 2 0 $3000 A rational person would prefer ________. A) Project L because they can avoid taxes by receiving cash flows later B) Project S because the money can be reinvested sooner C) information about profits instead of cash flows D) neither investment over the other