Grant Exchanges an Old Pizza Oven from His Business for a New

question 105

Multiple Choice

Grant exchanges an old pizza oven from his business for a new oven. In addition to the old oven, which had a basis of $10,000, Grant pays $10,000. The new oven is valued at $22,000. What is Grant's basis in the new oven?

• A)$12,000
• B)$16,000
• C)$20,000
• D)$22,000
• E)$32,000

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Definitions:

Restricted Shares

types of stock which are subject to certain restrictions, typically related to the vesting period, and are not fully transferrable until certain conditions are met.

Participation in Earnings

A method where stakeholders, usually employees or managers, receive a share of the company's profits, typically based on predetermined criteria.

Non-Controlling Interest

The portion of equity interest in a subsidiary not attributable directly or indirectly to the parent company, reflecting minority shareholders' equity in the subsidiary's net assets.

Shareholders' Equity

The residual interest in the assets of a company after deducting liabilities, representing the ownership equity spread among shareholders.