Albert's Sole Proprietorship Owns the Following Assets: * Potential

question 48

Multiple Choice

Albert's sole proprietorship owns the following assets: * Potential § 1245 recapture of $45,000.
** Straight-line depreciation was used.
Albert sells his sole proprietorship for $500,000.Calculate Albert's recognized gain or loss and classify it as capital or ordinary.

• A)$230,000 ordinary income.
• B)$230,000 capital gain.
• C)$115,000 ordinary income and $115,000 capital gain.
• D)$110,000 ordinary income and $120,000 capital gain.
• E)None of the above.

Recognize various inventory and sales terms and their implications in accounting.

Understand the impact of the perpetual inventory system on financial transactions and statements.

Recognize the accounting treatment for trade discounts and purchase discounts.

Identify the ownership and responsibility for freight costs in FOB shipping point and FOB destination terms.

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Definitions:

School-aged Children

Children in the age range typically associated with attending primary and early secondary education, usually from 6 to 12 years old.

Diagnosed

The process of identifying a disease, condition, or syndrome based on its symptoms and diagnostic tests.

Percentage

A mathematical term that represents a number or ratio expressed as a fraction of 100.

ADHD

Attention Deficit Hyperactivity Disorder, a neurodevelopmental disorder characterized by inattention, impulsiveness, and hyperactivity.