Suppose Instead That in the Preceding Problem the Bennetts Sold

question 83

Multiple Choice

Suppose instead that in the preceding problem the Bennetts sold their home for $800,000. ftey moved into a smaller home costing $250,000. How much gain must they recognize?

• A) $560,000
• B) $500,000
• C) $310,000
• D) $60,000
• E) None of the above

---

Definitions:

Equity Method

An accounting method used to assess the profits earned through an investment by recognizing income and dividends from the invested entity.

Amortization

The process of spreading out the original cost of an intangible asset over the duration it serves its purpose.

Dividends

Payments made by a corporation to its shareholder members, derived from the company's earnings.