Bud Exchanges a Business Use Machine with an Adjusted Basis

question 108

Multiple Choice

Bud exchanges a business use machine with an adjusted basis of $22,000 and a fair market value of $30,000 for another business use machine with a fair market value of $28,000 and $2,000 cash. What is Bud's recognized gain or loss?

• A)$0
• B)$2,000
• C)$6,000
• D)$8,000
• E)None of the above

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Definitions:

Responsibility Centres

Units within an organization for which managers are responsible, focusing on revenues, costs, or a combination of both, to measure performance.

Budgetary Slack

The practice of underestimating revenue or overestimating expenses to make budget targets more easily attainable.

Window Dress

Window Dressing is a financial strategy used by companies to improve the appearance of their financial statements or investment portfolio, often at the end of an accounting period.

Sales Staff

Employees responsible for the sale of products or services, pivotal in achieving business revenue targets and maintaining customer relationships.