Orange Company Had Machinery Destroyed by a Fire on December

question 15

Multiple Choice

Orange Company had machinery destroyed by a fire on December 23,2013.The machinery had been acquired on April 1,2011,for $49,000 and its adjusted basis was $14,200.The machinery was completely destroyed and Orange received $30,000 of insurance proceeds for the machine and did not replace it.This was Orange's only casualty or theft event for the year.As a result of this event,Orange has:

• A)$4,200 ordinary loss.
• B)$15,800 § 1245 recapture gain.
• C)$14,200 § 1245 recapture gain.
• D)$30,000 § 1231 gain.
• E)None of the above.

Recognize the economic implications of barter vs. money economies.

Identify the main functions of money.

Comprehend the historical development and role of credit cards.

Understand the regulatory framework governing banks in the U.S., including interstate banking and the role of the FDIC.

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Definitions:

Supplies Withdrawal

The act of taking out supplies from inventory for use, typically recorded as an expense when they are used rather than when purchased.

Increases and Decreases

Terms referring to the changes in financial statement amounts from one period to another, affecting assets, liabilities, revenues, and expenses.

Types of Accounts

Categories into which financial transactions are grouped in accounting, such as assets, liabilities, equity, revenue, and expenses.

Debit or Credit

Debit or credit are terms used in accounting to indicate whether an entry increases or decreases an account balance, impacting the balance sheet and income statement differently.