Longworth Partnership
Question
In year 0, Longworth Partnership purchased a machine for $53,500 to use in its business. In year 3, Longworth sold
the machine for $40,700. Between the date of the purchase and the date of the sale, Longworth depreciated the machine by $22,500.
| a. | What amount of gain (loss) is recognized on the sale?Total Gain/(Loss) Recognized:Character of Recognized Gain/(Loss):Ordinary Gain/(Loss):1231 Gain/(Loss): |
| b. | What amount of gain (loss) is recognized on the sale if the sale proceeds were increased to $66,500?Total Gain/(Loss) Recognized:Character of Recognized Gain/(Loss):Ordinary Gain/(Loss):1231 Gain/(Loss): |
| c. | What amount of gain (loss) is recognized on the sale if the sale proceeds were decreased to $23,600?Total Gain/(Loss) Recognized:Character of Recognized Gain/(Loss):Ordinary Gain/(Loss):1231 Gain/(Loss): |
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