Sonny Exchanges a Productive Use Machine (Adjusted Basis of $20,000)

question 115

Multiple Choice

Sonny exchanges a productive use machine (adjusted basis of $20,000) for a new machine worth $18,000.In addition, he receives cash of $6,000.What is the recognized gain or loss and the basis of the new machine?

• A)$0 and $18,000.
• B)$0 and $22,000.
• C)$4,000 and $18,000.
• D)$4,000 and $24,000.
• E)None of the above.

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Definitions:

Serial Casting

A medical technique involving the use of successive casts to gradually stretch contracted muscles or correct deformities.

Venous Stasis

A condition of slow blood flow in the veins, usually in the legs, contributing to swelling, pain, and potentially blood clots.

Skin Traction

A method used in orthopedics to apply a pulling force to a limb or other part of the body using adhesive materials or devices attached to the skin.