Walter, Who Owns All of the Ajax Corporation Stock, Purchases

question 76

Multiple Choice

Walter, who owns all of the Ajax Corporation stock, purchases a truck from Ajax Corporation in January. The truck cost $12,000 and has a $10,000 adjusted basis. Walter pays the truck's $8,000 FMV. Later in the same year, Walter sells the truck to an unrelated party for $13,000. With respect to these transactions

• A)Ajax Corporation reports a loss of $2,000 and Walter reports a gain of $5,000.
• B)Ajax Corporation reports no loss and Walter reports a gain of $3,000.
• C)Ajax Corporation reports a loss of $4,000 and Walter reports a gain of $5,000.
• D)Ajax Corporation reports no loss and Walter reports a gain of $5,000.

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Definitions:

First-Line Manager

A supervisor directly overseeing the work of non-managerial employees, typically the lowest layer of management in an organizational hierarchy.

Department Manager's Lack

Refers to a situation where there is a deficiency or absence of leadership and decision-making in a specific department.

Visibility and Availability

The extent to which something can be easily seen and accessed by those who need it.

Management Style

The way a manager works with and oversees employees to achieve organizational goals.