Sumner Sold Equipment That It Uses in Its Business for $30,000

question 37

Multiple Choice

Sumner sold equipment that it uses in its business for $30,000. Sumner bought the equipment a few years ago for $80,000 and has claimed $40,000 of depreciation expense. Assuming that this is Sumner's only disposition during the year, what is the amount and character of Sumner's gain or loss?

• A) $10,000 §1231 loss.
• B) $10,000 §1245 loss.
• C) $50,000 ordinary loss.
• D) $10,000 capital loss.
• E) None of the choices are correct.

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Definitions:

Individualistic Culture

Characterizes societies where the ties between individuals are loose and everyone is expected to look after themselves and their immediate family only.

Monochronic Culture

Cultures where time is viewed linearly, with a focus on scheduling, punctuality, and doing one thing at a time.

Specific Agenda

A detailed plan or list of items to be discussed, addressed, or accomplished in a meeting or event.

Polychronic Cultures

Cultures that value multitasking and the simultaneous management of multiple tasks or events.