G&G IncTransferred an Old Asset with a $110,300 Adjusted Tax Basis

question 64

Multiple Choice

G&G Inc.transferred an old asset with a $110,300 adjusted tax basis plus $20,000 cash in exchange for a new asset worth $150,000.Which of the following statements is false?

• A)The old asset's FMV is $150,000.
• B)If the exchange is nontaxable,G&G's recognized gain is -0-.
• C)If the exchange is nontaxable,G&G's tax basis in the new asset is $130,300.
• D)None of the statements is false.

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Definitions:

Fixed Factory Overhead Volume Variance

The difference between the budgeted and actual fixed overhead costs, due to variations in production levels.

Variable Factory Overhead Controllable Variance

The difference between the actual variable overhead costs incurred and the expected costs based on the standards set for the production volume.

Total Factory Overhead Cost Variance

The difference between the actual overhead costs incurred and the standard overhead costs assigned to production over a given period.

Factory Overhead Cost Budget

Budget that estimates the cost for each item of factory overhead needed to support budgeted production.