In the Current Year,Marcus Reports the Following Casualty Gains and Losses

question 124

Multiple Choice

In the current year,Marcus reports the following casualty gains and losses on personal-use property.Assets X and Y are destroyed in the first casualty while Z is destroyed in a second casualty. As a result of these losses and insurance recoveries,Marcus must report

• A)a net gain of $3,700.
• B)a long-term gain of $4,900 on asset X; a short-term capital loss of $900 on asset Y; and a short-term capital loss of $200 on asset Z.
• C)a long-term capital gain of $5,000 on asset X; a short-term capital loss of $900 on asset Y; and a short-term capital loss of $200 on asset Z.
• D)a long-term capital gain of $5,000 on asset X; a short-term capital loss of $900 on asset Y; and a short-term capital loss of $300 on asset Z.

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Definitions:

Accrued Revenue

Revenue earned but not yet received or recorded at the end of an accounting period.

Fees Earned

Revenue generated from services provided by a business during a specific period.

Accounts Receivable

This refers to the money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Contra Expense Account

An account that is offset against an expense account on the income statement, effectively reducing the total expense reported.