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The business equipment of Connor Corporation was destroyed in a fire. The insurance company reimburses Connor $221,000. At the time of the fire, the adjusted basis in the equipment was $171,000. Two months after received the insurance proceeds, Connor Corporation purchases similarly functioning equipment that costs $215,000.

a. Compute Connor's realized and recognized gain or loss from the casualty.

b. What is Connor's basis in the new equipment.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M970761

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