Gold Company Was Experiencing Financial Difficulties, but Was Not Bankrupt

question 116

Multiple Choice

Gold Company was experiencing financial difficulties, but was not bankrupt or insolvent.The National Bank, which held a mortgage on other real estate owned by Gold, reduced the principal from $110,000 to $85,000. The bank had made the loan to Gold when it purchased the real estate from Silver, Inc.Pink, Inc., the holder of a mortgage on Gold's building, agreed to accept $40,000 in full payment of the $55,000 due.Pink had sold the building to Gold for $150,000 that was to be paid in installments over 8 years.As a result of the above, Gold must:

• A)Include $40,000 in gross income.
• B)Reduce the basis in its assets by $40,000.
• C)Include $25,000 in gross income and reduce its basis in its assets by $15,000.
• D)Include $15,000 in gross income and reduce its basis in the building by $25,000.
• E)None of the above.

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Definitions:

Biological Approach

A perspective in psychology that emphasizes the importance of physical processes in the brain and other organs in understanding behavior and mental processes.

Heredity and Environment

The two main factors that contribute to the development of an individual’s physical and psychological traits, with heredity referring to genetic inheritance and environment to life experiences and conditions.

Human Genome

The human genome is the complete set of nucleic acid sequences for humans, embodying all the hereditary information encoded in DNA, including all the genes.

Conditioning

A behavioral process whereby a response becomes more frequent or predictable in a given environment due to reinforcement.