Last Year, Lucy Purchased a $100,000 Account Receivable for $90,000

question 86

Multiple Choice

Last year, Lucy purchased a $100,000 account receivable for $90,000. During the current year, Lucy collected $97,000 on the account. What are the tax consequences to Lucy associated with the collection of the account receivable? No subsequent collections are expected.

• A) $0
• B) $2,000 gain
• C) $3,000 loss
• D) $13,000 loss
• E) None of the above

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Definitions:

Absolute Threshold

The minimum intensity of stimulus that can be detected by the sensory systems, below which the stimulus is not perceived.

Hearing Ability

The capability to perceive sound by detecting vibrations through an organism's ear or analogous sensory organs.

Improves

To become better or to make something better in quality, value, or performance.

Absolute Threshold

The minimum intensity at which a stimulus can be detected by an individual 50% of the time.