A Corporation Sells a Machine Used in Its Business for 9

question 8

Multiple Choice

A corporation sells a machine used in its business for 9 years for $22,000.The machine originally cost $120,000 and was fully depreciated.Its gain will be treated as:

• A)Capital gain
• B)Section 1231 gain
• C)Section 1245 recapture
• D)Section 1250 recapture

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Definitions:

Consolidated Cost Of Goods Sold

The total cost of goods that have been sold by a parent company and its subsidiaries, presented as a single figure in consolidated financial statements.

Intra-entity Transfers

Transactions that occur between two units within the same company, such as the transfer of goods or services from one department to another.

Consolidated Sales

The total sales revenue of a company and its subsidiaries combined, presented as a single figure in financial statements.

Gross Profit

Gross Profit is the financial gain obtained after deducting the cost of goods sold (COGS) from total revenue, indicating the efficiency of a company's core operations.