Mason Received $20,000 Cash and Equipment Worth $10,000 in Exchange

question 49

Multiple Choice

Mason received $20,000 cash and equipment worth $10,000 in exchange for land that was encumbered by an $80,000 mortgage that the buyer assumed.Mason's basis for the land is $90,000.What is Mason's realized gain or loss on the sale?

• A)$20,000 realized gain
• B)$10,000 realized gain
• C)$10,000 realized loss
• D)no realized gain or loss

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Definitions:

Total Current Assets

The sum of all assets of a company expected to be converted into cash within one financial year.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services delivered or used but not yet paid for.

Current Liabilities

Financial obligations a company owes and is due to pay within a year.

Total Current Assets

The sum of all assets expected to be converted into cash within one year.