Amanda Uses a Delivery Van in Her Business

question 66

Essay

Amanda uses a delivery van in her business.The adjusted basis is $21,000,and the fair market value is $18,000.The delivery van is stolen and Amanda receives insurance proceeds of $18,000.Determine Amanda's realized and recognized gain or loss.

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Definitions:

Liabilities

Liabilities refer to financial obligations or debts that a company owes, which are expected to be settled through the transfer of assets, provision of services, or other economic benefits.

Account

A record summarizing all the transactions pertaining to a single item in the accounting equation.

Debit And Credit Side

Terms used to describe the two sides of an accounting ledger; the debit side records increases in assets and expenses and decreases in liabilities and equity, while the credit side records increases in liabilities, equity, and revenues and decreases in assets and expenses.

Source Document

A primary document that holds the necessary information to verify a transaction recorded in a financial system.