A Factory Building Owned by Amber, Inc

question 20

Multiple Choice

A factory building owned by Amber, Inc. is destroyed by a hurricane. The adjusted basis of the building was $400,000 and the appraised value was $425,000. Amber receives insurance proceeds of $390,000. A factory building is constructed during the nine-month period after the hurricane at a cost of $450,000. What is the recognized gain or loss and what is the basis of the new factory building?

• A) $0 and $450,000.
• B) $0 and $460,000.
• C) ($10,000) and $440,000.
• D) ($10,000) and $450,000.
• E) None of the above.

Learning how the ethical tone of an organization is set and influenced.

Applying ethical standards across global communities.

Understanding the role and impact of individual actions on ethical standards.

Analyzing the differences between ethical behaviors and legal obligations.

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Definitions:

State

A politically organized body of people under a single government, often recognized as a sovereign entity.

Acids

Substances that release hydrogen ions (H+) when dissolved in water, possessing a sour taste and able to neutralize bases.

Bases

Substances that can accept protons (H+) and have a high pH; in solution, they can easily donate an electron pair.