Question
On January 10, 2017, a fire destroyed a warehouse owned by NP Company. NPs adjusted basis in the warehouse was $575,000. On March 12, 2017,
On January 10, 2017, a fire destroyed a warehouse owned by NP Company. NPs adjusted basis in the warehouse was $575,000. On March 12, 2017, NP received a $740,000 reimbursement from its insurance company. In each of the following cases:
- Determine NPs recognized gain on this property disposition. Assume that NP would elect to defer gain recognition when possible. NPs board of directors decided not to replace the warehouse.
- Determine NPs recognized gain on this property disposition. Assume that NP would elect to defer gain recognition when possible. On January 2, 2019, NP paid $745,000 to acquire a warehouse to store its inventory.
- Determine NPs recognized gain on this property disposition. Assume that NP would elect to defer gain recognition when possible. On February 8, 2020, NP paid $745,000 to acquire a warehouse to store its inventory.
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Principles of Auditing and Other Assurance Services
Authors: Ray Whittington, Kurt Pany
19th edition
978-0077804770, 78025613, 77804775, 978-0078025617
