Problem 14-86 (b) (LO. 9)Griffin sold three items of business equipment for a total of $144,000. None of the equipment was appraised to determine its value. Griffin's cost and adjusted basis for the assets are shown below.AssetCost AdjustedBasisEquipment1$63,800 $40,000Equipment 234,80032,000Equipment 346,40022,000Total$145,000$94,000 Griffin has been unable to establish the fair market values of the three assets. All he can determine is that combined they were worth $144,000 to the buyer in this arm's length transaction. How should Griffin allocate the sales price and figure the gain or loss on the sale of the three assets? d. If Griffin allocates the $144,000 selling price to each asset based on its relative adjustedbasis, determine the gain or loss.In your computation round any division to six decimal places. Then, round yourfinal answer to the nearest dollar.AllocatedAdjustedAssetSale PriceBasisDifferenceGain or LossEquipment$40,0001Equipment32,0002Equipment22,000Total$144,000$94,000%24 a. First, Griffin must consider thatof the equipment depreciation taken issubject to recapture asdue to § 1245. If the equipment is sold forthan what was paid for it, the excess of thev is treated asb. If Griffin allocates one-third of the selling price to each asset, determine the gain or loss.Do not round your intermediate computations. If required, round your finalanswers to the nearest dollar.AllocatedAdjustedAssetSale PriceBasisDifferenceGain or LossEquipment$40,0001Equipment32,0002Equipment22,0003Total$144,000$94,000c. If Griffin allocates the $144,000 selling price to each asset based on its relative originalcost, determine the gain or loss.In your computation round any division to two decimal places. If required, roundyour final answer to the nearest dollar.AllocatedAdjustedAssetSale PriceBasisDifference Gain or LossEquipment$40,0001Equipment32,0002Equipment22,000Total$144,000$94,000$4

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Problem 14-86 (b) (LO. 9) Griffin sold three items of business equipment for a total of $144,000. None of the equipment was appraised to determine its value. Griffin's cost and adjusted basis for the assets are shown below. Asset Cost Adjusted Basis Equipment1 $63,800 $40,000 Equipment 2 34,800 32,000 Equipment 3 46,400 22,000 Total $145,000 $94,000 Griffin has been unable to establish the fair market values of the three assets. All he can determine is that combined they were worth $144,000 to the buyer in this arm's length transaction. How should Griffin allocate the sales price and figure the gain or loss on the sale of the three assets?

Problem 14-86 (b) (LO. 9) Griffin sold three items of business equipment for a total of $144,000. None of the equipment was appraised to determine its value. Griffin's cost and adjusted basis for the assets are shown below. Asset Cost Adjusted Basis Equipment1 $63,800 $40,000 Equipment 2 34,800 32,000 Equipment 3 46,400 22,000 Total $145,000 $94,000 Griffin has been unable to establish the fair market values of the three assets. All he can determine is that combined they were worth $144,000 to the buyer in this arm's length transaction. How should Griffin allocate the sales price and figure the gain or loss on the sale of the three assets?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 6MCQ: Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense...

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