An Asset with a Book Value of $320,000 Is Sold

question 101

Multiple Choice

An asset with a book value of $320,000 is sold for $560,000.The tax rate is 20%.What is the tax effect of the gain?

• A)$48,000 cash outflow
• B)$64,000 cash outflow
• C)$112,000 cash outflow
• D)$192,000 cash outflow

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Definitions:

Algal Blooms

Rapid increase or accumulation in the population of algae in water systems, often resulting in a discoloration of the water and causing harm to the aquatic environment, including the production of toxins that can affect animal and human health.

Nitrogen

A colorless, odorless, tasteless, gaseous element, that makes up about 78% of the earth's atmosphere and is a vital component of living organisms.

Phosphorous

A highly reactive, non-metallic element essential for life, playing a key role in the formation of DNA, RNA, and ATP, among other biological compounds.

White Sucker Fish

A species of fresh-water fish (Catostomus commersonii), commonly found in North America, characterized by its elongated body and downturned mouth.