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  3. this year, sigma, incorporated generated $636,000

This year, Sigma, Incorporated generated $636,000 income from its routine business operations. In addition, the...

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Accounting

This year, Sigma, Incorporated generated $636,000 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months:

Initial Basis Accumulated Depreciation* Sale Price
Marketable securities $ 157,600 $ 0 $ 74,000
Production equipment 115,600 92,480 36,000
Business realty:
Land 235,500 0 241,750
Building 263,000 78,900 218,000

*Through date of sale.

Required:

  1. Compute Sigmas taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses.
  2. Recompute taxable income assuming that Sigma sold the securities for $174,000 rather than $74,000.
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