Equipment in Andy's Auto Body Repair Shop was completely destroyed by an explosion due to a...

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Equipment in Andy's Auto Body Repair Shop was completely destroyed by an explosion due to a natural gas leak ignited by a welding torch. The adjusted basis of the equipment was $250,000. The insurance company paid $300,000-the replacement value of the fully insured equipment. One month later, Andy purchased new equipment costing $400,000. As a result of this casualty and the insurance proceeds, the new equipment will have a basis of how much? A. $100,000 O B. $150,000 O C. $350,000 D. $400,000 Equipment in Andy's Auto Body Repair Shop was completely destroyed by an explosion due to a natural gas leak ignited by a welding torch. The adjusted basis of the equipment was $250,000. The insurance company paid $300,000-the replacement value of the fully insured equipment. One month later, Andy purchased new equipment costing $400,000. As a result of this casualty and the insurance proceeds, the new equipment will have a basis of how much? A. $100,000 O B. $150,000 O C. $350,000 D. $400,000

Answer rating: 100% (QA)

The correct answer is C 350000 Explanation The new equipment will have a basis of 350000 calculated ... View the full answer