Required information (The following information applies to the questions displayed below.) Moab Inc, manufactures and distributes high-tech biking gadgets. It has decided to streamline some of its operations so that it will be able to be more productive and efficient. Because of this decision it has entered into several transactions during the year. a. Moab Inc, sold a machine that it used to make computerized gadgets for $30,300 cash. It originally bought the machine for $21,200 three years ago and has taken $8,000 depreciation. b. Moab Inc. held stock in ABC Corp., which had a value of $22,000 at the beginning of the year. That same stock had a value of $25,230 at the end of the year. c. Moab Inc. sold some of its inventory for $9,000 cash. This inventory had a basis of $5,000. d. Moab Inc, disposed of an office building with a fair market value of $85,000 for another office building with a fair market value of $63,000 and $22,000 in cash. It originally bought the office building seven years ago for $72.000 and has taken $15,000 in depreciation. e. Moab Inc. sold some land held for investment for $45,000. It originally bought the land for $49,000 two years ago. f. Moab Inc. sold another machine for a note payable in four annual installments of $17,000. The first payment was received in the current year. It originally bought the machine two years ago for $52,000 and has claimed $10,000 in depreciation expense against the machine. g. Moab Inc. sold stock it held for eight years for $3,750. It originally purchased the stock for $2,600. h. Moab Inc. sold another machine for $9,300. It originally purchased this machine six months ago for $10,100 and has claimed $530 in depreciation expense against the asset. Req1 Reg 2 Determine the gain/loss realized and recognized in the current year for each of these events provided above. Also determine gain/loss recognized is 51231, capital, or ordinary. (Loss amounts should be indicated by a minus sign.) Asset Realized Gain/(Loss) Recognized Gain/(Loss) 5291 Ordinary Income 51231 Gain (Loss) 9,100 Ordinary Incomel(Loss) 51245 Ordinary Income $ 8,000S 0 Capital Gain (Loss) 1a $ 0 0 0 4,000 0 0 0 0 22.000 17,100 0 4,000 28,000 (4,000) 28,000 1,150 (270) 73,980 17,100 0 4,000 22,000 (4,000) 14,000 1,150 (270) 53,980 (4.000) 0 0 10,000 0 0 0 3,000 0 0 0 0 3,000 1,150 4,000 0 0 35,100 th (270) 3,730 Totals S $ $ 18,000 $ $ $ S (2,850) 27,000 A 0 A |$1231 Netting Process: $1231 gain $1231 loss Net $1231 gain Nonrecaptured $1231 losses Net $1231 gain A 35,100 X 4,000 27,000 X A A Ordinary Income: $1245 recapture $291 recapture Ordinary income Ordinary loss Ordinary income from $1231 netting Total 18,000 3,000 4,000 (270) 4,000 28,730 Capital Gains and Losses: Capital gain Capital loss Net capital gain 27,000 x (4,000) 31.000 X $
