Nanci Purchases All of the Assets of Michael's Security Service

question 77

Multiple Choice

Nanci purchases all of the assets of Michael's Security Service for $200,000.The assets are as follows:
$\begin{array}{lcc}\underline {\text {Asset}}& \underline {\text { Adjusted Basis }}& \underline {\text { Fair Market Value } }\\\text { Inventory } & \$ 25,000 & \$ 50,000 \\\text { Equipment } & 60,000 & 40,000 \\\text { Supplies } & 20,000 & 20,000 \\\text { Building } & 80,000 & 95,000 \\\text { Land } & \underline {10,000 }& \underline {20,000} \\&\$ 195,000 & \$ 225,000\end{array}$
What is Nanci's basis in the equipment?

• A)$17,776
• B)$35,556
• C)$40,000
• D)$60,000
• E)$61,538

---

Definitions:

Stable Positive Charge

An atomic or subatomic particle's constant state of having more protons than electrons, resulting in a net positive charge.

Unstable Positive Charge

Refers to a positive ion (cation) that lacks stability, often making it highly reactive and short-lived.

Glial Cells

Supportive cells in the nervous system that do not conduct nerve impulses but provide nutrition, support, and protection for neurons.

Neurons

Specialized cells in the nervous system that transmit information through electrical and chemical signals.