Several years ago, Nipher paid $70,000 to purchase equipment to use in its business. This year, it sold the equipment for $76,500. Accumulated MACRS depreciation through date of sale was $18,000. Determine the amount and character of Nipher's gain recognized.
A. $18,000 ordinary gain and $6,500 capital gain
B. $18,000 ordinary gain and $6,500 Section 1231 gain
C. $24,500 Section 1231 gain
D. $24,500 ordinary gain
Answer: B
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Osprey Company is trying to decide between the following two alternatives: Alternative A Alternative BProjected revenue$50,000 $60,000 Direct material 6,000 12,000 Assembly labor 9,000 9,000 Production supervisor's salary 10,000 10,000 Facility-related costs 10,000 15,000 Profit$15,000 $14,000 Which of the following conclusions can be drawn from this example?
A. Relevant costs may include variable costs and fixed costs. B. Fixed costs are sunk and thus are never relevant for decision making. C. Variable costs are always relevant for decision making. D. None of the above.
The Retained earnings account has a credit balance of $47,000 before closing entries are made. Total revenues for the period are $65,200, total expenses are $44,800, and dividends are $13,000. What is the correct closing entry for the revenue accounts?
A. Debit Revenue accounts $47,000; credit Retained earnings $47,000. B. Debit Income Summary $65,200; credit Revenue accounts $65,200. C. Debit Income Summary $47,000; credit Retained earnings $47,000. D. Debit Revenue accounts $65,200; credit Income Summary $65,200. E. Debit Revenue accounts $65,200; credit Retained earnings $47,000.
Why should the tasks of systems development and maintenance be segregated from operations?
Answer the following statements true (T) or false (F)
The majority of exceptions to the general rule regarding revenue recognition has evolved because new transactions have emerged that do not fit the mold of traditional transactions.