The AB Partnership Has a Machine with an FMV of $25,000

question 103

Multiple Choice

The AB Partnership has a machine with an FMV of $25,000 and a basis of $20,000. The partnership has taken an $8,000 depreciation on the machine. The unrealized receivable related to the machine is

• A)$0.
• B)$5,000.
• C)$8,000.
• D)$20,000.

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Definitions:

Coupon Rate

The annual rate of interest specified on a bond, expressed as a percentage of its face value.

Annual Coupon

The yearly interest payment paid to bondholders, typically expressed as a percentage of the bond's face value.

Face Value

The nominal or initial value stated on financial instruments like bonds or stock certificates, not necessarily equal to the market value.

Ontario Securities Commission

A regulatory body in Ontario, Canada, responsible for overseeing the capital markets within the province.