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:

Finishing Rate

The pace at which a production process or construction project is completed, often measured in units per hour or days per project phase.

Machine Hours

A measure of the amount of time a machine is operated, used in cost accounting to allocate expenses to products.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on their use of activities.

Budgeted Cost

The forecasted cost of a project or operation, set during the budgeting process and used for planning and control purposes.