In 2012, Allen Anders Sold an Asset Which Cost $70,000

question 72

Multiple Choice

In 2012, Allen Anders sold an asset which cost $70,000. Allen incorrectly claimed $40,000 depreciation over a five-year period. He should have claimed $50,000 depreciation. What was the adjusted basis when sold?

• A) $0
• B) $20,000
• C) $30,000
• D) $50,000
• E) $70,000

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Definitions:

Financial Statements

Documentation presenting a summary of a corporation's financial status, consisting of the balance sheet, income statement, and statement of cash flows.

Present Value

The present value of a future amount of money or series of cash flows, discounted at a certain rate of return.

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A legal dispute brought before a court of law where a verdict is made after consideration of the evidence.

Financial Statements

Financial statements are formal records of the financial activities and position of a business, person, or other entity, providing a detailed insight into its financial performance over a certain period.