Which of the following statements regarding the instalment sale of an entire bus

Question

Which of the following statements regarding the instalment sale of an entire bussiness is false? the sale price and expense of sale of an entire bussiness must be allocated because

1.Real and personal property can be reported on the instalment method but inventory can not.

2. any depreciation recaptureincome from the sale of depreciable property cannot be reported on the instalment method.

3.asset sold at a loss cannot be reported usins the instalment methord

4. intangable properyty cannot be reported using the instalment method.

Explanation / Answer

Ans is d . intangible property cannot be reported using the installment method.

Explanation: first three options are true in respect of installment sale but forth one is false, since intangibles are reported in installment method along with other assets. Allocation of sale price is done in a sequence in which intangibles comes in serial no of 4, 5, 6

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