Twelve Years Ago, Mr As a Result of the Sale, the Bathgates Should Recognize

Twelve years ago, Mr. and Mrs. Bathgate purchased a business. This year, they sold the business for $750,000 lump-sum payment. The business had the following balance sheet assets. $\begin{array}{lrr} &&& T a x \text { Basis } & \text { FMV } \\\text { Accounts receivable } &&& 63,500 & \$ 63,500 \\\text { Inventory } &&& 249,000 & 300,000\\\text { Furniture and fixtures: }\\\text { Cost } & \$ 468,000 &\\\text { Acc. depreciation } & (421,800) &\\&&&46,200&100,000\\\text { Purchased goodwill }\\\text { Cost } & \$ 300,000 &\\\text { Acc. amortization } & (233,600) &\\&&&66,400&286,500\\&&&\$ 425,100&\$ 750.000\\\end{array}$ As a result of the sale, the Bathgates should recognize:

A) $324,900 ordinary gain
B) $104,800 ordinary gain and $220,100 capital gain
C) $51,000 ordinary gain and $273,900 Section 1231 gain
D) None of the above

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