Grant Corporation Sells Land (A Noninventory Item)with a Basis of $57,000

question 18

Multiple Choice

Grant Corporation sells land (a noninventory item) with a basis of $57,000 for $100,000. Nichole will be paid on an installment basis in five equal annual payments, starting in the current year. The E&P for the year of sale will be increased as a result of the sale (excluding federal income taxes) by

• A)$0.
• B)$8,600.
• C)$43,000.
• D)$100,000.

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Definitions:

Rational

Pertains to decision-making processes that are based on logical reasoning and systematic analysis of alternatives.

Charismatic

Describes a person or quality that is compellingly attractive and inspiring due to an exceptional ability to influence and arouse enthusiasm.

Heuristic Device

An approach or method used to discover and learn something for oneself, often implemented in problem-solving and scientific research.

Conceptual Construct

A theoretical framework or idea that is built through the integration of various concepts to understand or explain phenomena.