The AB Partnership Has a Machine with an FMV of $25,000

question 103

Multiple Choice

The AB Partnership has a machine with an FMV of $25,000 and a basis of $20,000. The partnership has taken an $8,000 depreciation on the machine. The unrealized receivable related to the machine is

• A)$0.
• B)$5,000.
• C)$8,000.
• D)$20,000.

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Definitions:

Stated Rate

The annual interest rate declared on a financial instrument, such as a bond, without accounting for compounding within the year.

Rate Of Return

The accrual or diminishment of value in an investment over a specific epoch, visualized as a percentage of the investment’s inaugural cost.

Savings Account

A deposit account held at a bank or other financial institution that provides principal security and a modest interest rate.

Annually

A term describing an event or calculation made once every year.