A Plant Asset with a Book Value of $200,000 Is

question 66

Multiple Choice

A plant asset with a book value of $200,000 is sold for $150,000.The applicable tax rate is 40%.What is the tax effect of the loss on sale?

• A) $20,000 cash outflow
• B) $20,000 cash inflow
• C) $30,000 cash inflow
• D) $170,000 cash inflow

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Definitions:

Volcanic Eruptions

Natural geological phenomena involving the release of gases, ash, and molten rock from beneath the Earth's surface.

Oil Spill

The release of liquid petroleum hydrocarbons into the environment, especially marine areas, leading to pollution.

Geologic Resources

Naturally occurring materials of economic value extracted from the Earth, including minerals, fossil fuels, and groundwater.

Floodplains

Flat or nearly flat land adjacent to a stream or river that experiences occasional or periodic flooding.