Which is true about wilma

Assignment Help Accounting Basics

Reference no: EM132700272

Problem 1: Wilma owns a bakery. In 2018 she bought an oven for $10,000. In 2018 and 2019 she deducted depreciation of $3800. On 1/1/2020 she sold the equipment. Which of the following is true.

Select one or more:

a. If Wilma sells the equipment for more than the price she purchased it, and she sold no other equipment during the year, the gain will be taxed at ordinary income tax rates.

b. If Wilma sells the equipment for more than her purchase price, all of the depreciation taken is taxed at ordinary tax rates.

c. If Wilma sells the equipment for a lower price than she bought it and more than the adjusted basis she recognizes a gain.

d. If Wilma sells the equipment for more than the adjusted basis but less than the purchase price, only part of the depreciation will be taxed at ordinary rates.

e. If Wilma sells the equipment for a price lower than her purchase price minus the depreciation taken, none of the depreciation will be taxed at ordinary tax rates.

f. If Wilma sells the equipment for a higher price than she bought it, she recognizes 1231 gain.

g. If Wilma sells the equipment for the same price that she bought it she has no recognized gain or loss.

Reference no: EM132700272

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