Kathy Was a Shareholder in Matrix,Inc

question 91

Multiple Choice

Kathy was a shareholder in Matrix,Inc. ,when she sold the corporation a commercial building.The building cost $500,000 and the balance in the accumulated depreciation account was $400,000.Matrix,Inc. ,paid $100,000 in the year of sale and gave Kathy a note for $400,000 plus adequate interest due in 2018.

• A)Because Kathy is a shareholder in Matrix,she cannot report the gain by the installment method.
• B)Generally,if Kathy owned 100% of the Matrix stock,Kathy cannot use the installment method.
• C)Generally,if Kathy owned only 60% rather than 100% of the Matrix stock,she could use the installment method.
• D)Kathy cannot use the installment method to report the gain because the realized gain is equal to the depreciation she claimed on the building.
• E)None of the above.

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Definitions:

Agriculture Sector

The part of the economy concerned with the production, processing, and distribution of food, fiber, and products from plants and animals.

Globalization

The process by which businesses or other organizations develop international influence or start operating on an international scale.

Labour-intensive Jobs

Occupations or industries that require a high amount of manual work relative to capital investment, often characterized by high employment levels.

Collective Bargaining Process

A negotiation process between employers and a group of employees aimed at reaching agreements to regulate working salaries, working conditions, and other aspects of workers' compensation and rights.