LAS Owns a Building in North Bay

question 166

Multiple Choice

LAS owns a building in North Bay.LAS enters into an agreement with BH as follows: LAS sells the building to BH on 1/1/2014 for $2,900,000 (which was the building's fair value on that date) and immediately leases it back for $500,000 per year for 10 years.The historical cost of the building was $9,000,000 and accumulated amortization amounted to $7,000,000.The net effect of this transaction on the statement of comprehensive income in the year of sale would be:

• A)a reduction to net income of $400,000.
• B)a reduction to net income of $500,000.
• C)a reduction to net income of $590,000.
• D)a reduction to net income of $410,000.

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Definitions:

System.exit()

A method in Java used to terminate the currently running Java virtual machine by giving a status code.

Iteration

Iteration refers to the process of executing a sequence of statements repeatedly, either a fixed number of times or until a certain condition is met, as seen in loops.

Precedence

The rule used to clarify which operations in an expression are performed first when multiple operations occur.

Switch Statement

A control statement in programming used to perform different actions based on different conditions, testing a variable against a list of values.