Barnett Corporation Owns an Office Building That Cost $900,000

question 24

Multiple Choice

Barnett Corporation owns an office building that cost $900,000. Barnett has taken $600,000 of depreciation on the building. The property is subject to a $600,000 mortgage. The office building has a current FMV of $400,000. Barnett Corporation is liquidated and the office building is distributed to a single individual shareholder who assumes the mortgage. Barnett Corporation must recognize

• A)no gain or loss.
• B)a $100,000 gain.
• C)a $300,000 gain.
• D)none of the above

---

Definitions:

Just-in-time Scheduling

A strategy used in manufacturing and logistics to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs.

Minimizes Inventory

Strategies or practices aimed at keeping the amount of goods stored by a business as low as possible to reduce costs and increase efficiency.

Supply Chain Management

The administration of the movement of products and services encompassing every process that turns raw materials into finished goods.

Purchasing

The process of obtaining goods or services, typically for business purposes, by paying a price or agreeing to a contract.