A Tornado Demolished Several Delivery Vans Owned for Three Years

question 109

Multiple Choice

A tornado demolished several delivery vans owned for three years by Wadham Company.Wadham's adjusted basis in the vans was $28,400,and Wadham paid $90,000 to purchase new vans.Wadham received a $25,000 settlement from its casualty insurance company.Consequently,Wadham recognizes:

• A)$3,400 Section 1231 loss
• B)$65,000 Section 1231 loss
• C)$65,000 ordinary loss
• D)None of the above

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Definitions:

Independent Variable

In an experiment, the variable that is manipulated by the researcher to observe its effects on the dependent variable.

Dependent Variable

The variable in an experiment that is observed and measured for changes to assess the effect of manipulations in the independent variable.

Psychological Experiment

A research method in psychology that tests hypotheses and theories by observing the outcomes of controlled interventions on human or animal subjects.

Independent Variable

In an experiment, the variable that is intentionally changed or manipulated by the researcher to observe its effect on the dependent variable.