A Factory Building Owned by Amber, Inc

question 20

Multiple Choice

A factory building owned by Amber, Inc. is destroyed by a hurricane. The adjusted basis of the building was $400,000 and the appraised value was $425,000. Amber receives insurance proceeds of $390,000. A factory building is constructed during the nine-month period after the hurricane at a cost of $450,000. What is the recognized gain or loss and what is the basis of the new factory building?

• A) $0 and $450,000.
• B) $0 and $460,000.
• C) ($10,000) and $440,000.
• D) ($10,000) and $450,000.
• E) None of the above.

---

Definitions:

Maslow

A theory of human motivation that suggests people are motivated by a hierarchy of needs, starting from basic physiological needs to self-actualization.

Self-Actualized

Pertaining to the state of having achieved one's full potential, often associated with realizing personal talents and capabilities.

Hawthorne Effect

The tendency of persons singled out for special attention to perform as expected.

Group Atmosphere

The overall mood, spirit, or tone that characterizes the interactions and dynamics within a team or organizational unit.