Norman Exchanges a Machine He Uses in His Pool Construction

question 110

Multiple Choice

Norman exchanges a machine he uses in his pool construction business for a used machine worth $6,000 to use in the same business. He purchased the machine 3 years ago for $22,000 and had taken depreciation of $9,000 on the machine. In the exchange, Norman also receives $3,000 of cash. As a result of the exchange,
I.Norman realizes a loss of $4,000 on the exchange.
II.Norman's basis in the acquired machine is $13,000.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Theory of Planned Behavior

A theory that predicts an individual's intention to engage in a behavior at a specific time and place, considering attitudes, subjective norms, and perceived control over the behavior.

Behavioral Intentions

An individual's stated likelihood or plan to perform a particular behavior, considered a predictor of actual behavior in various models of behavioral change.

Achievement Goal Theory

A theory that focuses on how individuals are motivated by their goals, specifically in achievement settings like school and sports.

Mastery and Performance

Concepts related to the orientation of individuals towards learning, where mastery focuses on developing competence and understanding, while performance emphasizes displaying competence and comparing oneself with others.