A Factory Building Owned by Amber, Inc

question 20

Multiple Choice

A factory building owned by Amber, Inc. is destroyed by a hurricane. The adjusted basis of the building was $400,000 and the appraised value was $425,000. Amber receives insurance proceeds of $390,000. A factory building is constructed during the nine-month period after the hurricane at a cost of $450,000. What is the recognized gain or loss and what is the basis of the new factory building?

• A) $0 and $450,000.
• B) $0 and $460,000.
• C) ($10,000) and $440,000.
• D) ($10,000) and $450,000.
• E) None of the above.

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Definitions:

Transmission

The process by which genetic information is passed on from one generation to another or the process by which nerve impulses are sent across a synapse.

Acupuncture

A form of alternative medicine and a key component of traditional Chinese medicine involving thin needles inserted into the body at specific points.

Endorphins

Endogenous substances that offer pain relief and increase pleasure sensations.

Agonists

Substances that activate neurotransmitter receptors, enhancing the natural activity of neurotransmitters.