Identify Which of the Following Statements Is True

question 71

Multiple Choice

Identify which of the following statements is true.

• A)Upon liquidation,any capitalized expenditures unamortized at the time of liquidation should be deducted if they have no further value to the corporation.
• B)Shareholders who receive an installment obligation as part of their liquidating distribution ordinarily report the FMV of their obligation as part of the consideration received to calculate the amount of recognized gain or loss.
• C)A liquidating corporation treats expenses associated with selling its property as an offset against the sales proceeds.
• D)All the above are true.

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Definitions:

Net Income

Net Income is the total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Property, Plant

Assets that are used in operations and have a useful life longer than one year, such as buildings, machinery, and equipment.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was acquired.

Cash Dividends

Payments made by a corporation to its shareholder members from current or retained earnings, usually in the form of cash.