In year 0, Longworth Partnership purchased a machine for $44,500 to use in its business. In year 3, Longworth sold the machine for $38,400. Between the date of the purchase and the date of the sale, Longworth depreciated the machine by $31,100. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) a. What are the amount and character of the gain or loss Longworth will recognize on the sale? DescriptionAmountTotal Gain/(Loss) Recognized Character of Recognized Gain/(Loss): Ordinary Gain/(Loss) §1231 gain/(loss) b. What are the amount and character of the gain or loss Longworth will recognize on the sale if the sale proceeds are increased to $68,000? DescriptionAmountTotal Gain/(Loss) Recognized Character of Recognized Gain/(Loss): Ordinary Gain/(Loss) §1231 gain/(loss) c. What are the amount and character of the gain or loss Longworth will recognize on the sale if the sale proceeds are decreased to $11,200? DescriptionAmountTotal Gain/(Loss) Recognized Character of Recognized Gain/(Loss): Ordinary Gain/(Loss) §1231 gain/(loss)

Particulars(a)When Sale Proceeds = $38,400(b)When Sale Proceeds = $68,000(c )When Sale Proceeds =…

Answered: In year 0, Longworth Partnership…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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In year 0, Longworth Partnership purchased a machine for $44,500 to use in its business. In year 3, Longworth sold the machine for $38,400. Between the date of the purchase and the date of the sale, Longworth depreciated the machine by $31,100. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)

a. What are the amount and character of the gain or loss Longworth will recognize on the sale?

Description	Amount
Total Gain/(Loss) Recognized
Character of Recognized Gain/(Loss):
Ordinary Gain/(Loss)
§1231 gain/(loss)

b. What are the amount and character of the gain or loss Longworth will recognize on the sale if the sale proceeds are increased to $68,000?

Description	Amount
Total Gain/(Loss) Recognized
Character of Recognized Gain/(Loss):
Ordinary Gain/(Loss)
§1231 gain/(loss)

c. What are the amount and character of the gain or loss Longworth will recognize on the sale if the sale proceeds are decreased to $11,200?

Description	Amount
Total Gain/(Loss) Recognized
Character of Recognized Gain/(Loss):
Ordinary Gain/(Loss)
§1231 gain/(loss)

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