Problem 17-55 (b) (LO. 3, 8) 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 as follows: Adjusted Basis Asset Cost Equipment1 Equipment 2 Equipment 3 $63,800 34,800 46,400 $40,000 32,000 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? a. First, Griffin must consider that of the equipment depreciation taken is subject to recapture as due to 1245. If the equipment is sold for than what was paid for it, the excess of the is treated as b. 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 final answers to the nearest dollar. Allocated Sale Price Adjusted Basis Asset Difference Gain or Loss Equipment 1 $40,000 Equipment 2 32,000 Equipment 3 22,000 Total $144,000 $94,000 C. If Griffin allocates the $144,000 selling price to each asset based on its relative original cost, determine the gain or loss. In your computation round any division to two decimal places. If required, round your final answer to the nearest dollar. Allocated Sale Price Adjusted Basis Asset Difference Gain or Loss Equipment 1 $40,000 Equipment 2 32,000 Equipment 3 22,000 Total $144,000 $94,000 d. If Griffin allocates the $144,000 selling price to each asset based on its relative adjusted basis, determine the gain or loss. In your computation round any division to six decimal places. Then, round your final answer to the nearest dollar. Allocated Sale Price Adjusted Basis Asset Difference Gain or Loss Equipment 1 $40,000 Equipment 2 32,000 Equipment 3 22,000 Total $144,000 $94,000 Problem 17-55 (b) (LO. 3, 8) 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 as follows: Adjusted Basis Asset Cost Equipment1 Equipment 2 Equipment 3 $63,800 34,800 46,400 $40,000 32,000 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? a. First, Griffin must consider that of the equipment depreciation taken is subject to recapture as due to 1245. If the equipment is sold for than what was paid for it, the excess of the is treated as b. 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 final answers to the nearest dollar. Allocated Sale Price Adjusted Basis Asset Difference Gain or Loss Equipment 1 $40,000 Equipment 2 32,000 Equipment 3 22,000 Total $144,000 $94,000 C. If Griffin allocates the $144,000 selling price to each asset based on its relative original cost, determine the gain or loss. In your computation round any division to two decimal places. If required, round your final answer to the nearest dollar. Allocated Sale Price Adjusted Basis Asset Difference Gain or Loss Equipment 1 $40,000 Equipment 2 32,000 Equipment 3 22,000 Total $144,000 $94,000 d. If Griffin allocates the $144,000 selling price to each asset based on its relative adjusted basis, determine the gain or loss. In your computation round any division to six decimal places. Then, round your final answer to the nearest dollar. Allocated Sale Price Adjusted Basis Asset Difference Gain or Loss Equipment 1 $40,000 Equipment 2 32,000 Equipment 3 22,000 Total $144,000 $94,000
