Cary Is Experiencing Cash Flow Problems During the Current Year

question 127

Multiple Choice

Cary is experiencing cash flow problems during the current year. Rather than foreclose on an $80,000 business loan, his bank agrees to reduce the debt to $50,000. Prior to the debt reduction, Cary's total assets were $500,000 and his total liabilities were $510,000. How much income must Cary recognize from the reduction of his bank loan?

• A)- 0 -
• B)$10,000
• C)$20,000
• D)$30,000

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Definitions:

Domination

The exertion of control or influence over others by an individual or group, often in a way that limits freedom.

Appeasement

A diplomatic policy of making political or material concessions to an enemy or potential aggressor to avoid conflict or maintain peace.

Effective Communication

The process of exchanging information, thoughts, and feelings in a way that is clear, concise, and understood by all parties involved.

Organizational Members

Individuals who belong to and participate in the structure of an organization, contributing to its culture and goals.