Cary Is Experiencing Cash Flow Problems During the Current Year

question 127

Multiple Choice

Cary is experiencing cash flow problems during the current year. Rather than foreclose on an $80,000 business loan, his bank agrees to reduce the debt to $50,000. Prior to the debt reduction, Cary's total assets were $500,000 and his total liabilities were $510,000. How much income must Cary recognize from the reduction of his bank loan?

• A)- 0 -
• B)$10,000
• C)$20,000
• D)$30,000

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Definitions:

Suppliers

Entities or individuals that provide goods or services to the market, often in exchange for payment.

Laptops

Portable computers equipped with a keyboard and a screen, designed for mobile use.

Technology Improvements

Enhancements and advancements in technology that increase productivity, efficiency, or utility in various sectors.

Curve Shifts

Movements or adjustments in the position of a graphed line, such as those in supply and demand curves in economics, indicating a change in underlying factors affecting these curves.