Refer to Fact Pattern 30-1B

question 60

Multiple Choice

Refer to Fact Pattern 30-1B. The highest priority belongs to

• A) Kay and Music, Inc.
• B) Kay only.
• C) Lora only.
• D) Music, Inc., only.

---

Definitions:

Installment Method

A tax procedure that allows the taxpayer to spread the income and taxes owed on the sale of property over the period in which the payments are received.

Gross Profit Percentage

A financial ratio showing the proportion of money left over from revenues after accounting for the cost of goods sold.

Contract Price

The total amount agreed upon in a contract for the sale of goods, services, or property.

Involuntary Conversion

The forced exchange of an asset into a different form or property, often due to theft, casualty or condemnation, with potential tax implications.