Eight Years Ago You Purchased an Asset for $100,000 That

question 100

Multiple Choice

Eight years ago you purchased an asset for $100,000 that has yielded a nominal capital gain of $30,000. If you sold the asset today, your inflation-adjusted capital gains would be zero due to inflation over the last eight years. The capital gains tax is 28 percent. If you sold the asset today your tax liability would be

• A) zero.
• B) $28,000.
• C) $8,400.
• D) cannot be determined without more information.

Know the conditions under which a party's duty to perform is conditioned.

Comprehend the legal ramifications of tendering performance and payment in contractual agreements.

Grasp the criteria for substantial performance and how it impacts contractual obligations.

Understand specific contract termination methods, including mutual rescission and novation.

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Definitions:

Filling

In manufacturing, it refers to the process of putting product into containers or packaging; in accounting, it could refer to completing or updating records but this usage is less direct.

Plant Assets

These are long-term tangible assets that are used in the production of goods and services and are expected to provide benefits for more than one year.

Income Statement

A financial statement that reports a company's financial performance over a specific period, displaying revenue, expenses, and net income.

Additions and Improvements

Capital expenditures made to increase the value of existing assets, often leading to a longer useful life or increased functionality.