A Barn Held More Than One Year and Used in a Business

question 125

Multiple Choice

A barn held more than one year and used in a business is destroyed in a tornado. The barn originally cost $356,000 and was fully depreciated using straight-line depreciation. The barn was insured for its $543,000 replacement cost minus a deductible of $1,000. Which of the statements below is correct concerning these facts?

• A) The barn was a long-term personal use asset.
• B) There is a casualty loss from disposition of the barn.
• C) The recognized gain from disposition of the barn is $186,000.
• D) The recognized gain from disposition of the barn is subject to special netting rules.
• E) c. and d.

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Definitions:

Expectancy Effects

The phenomenon where a person's behavior or performance is influenced by the expectations placed upon them by others, often leading to the fulfillment of those expectations.

Consensual Criteria

The agreement among researchers or judges on the standards used to evaluate or judge something, ensuring consistent and objective assessment.

Accuracy Of Personality Judgments

Refers to how precisely people can assess others' personalities, often influenced by their observations, the contexts, and their biases.

Shy

Feeling nervous or timid in the presence of others, often leading to withdrawal from social interactions.