Recognizing the income problem


If Suma is insolvent with assets of $30,000 and liabilities of $45,000 and one of Suma's creditors then cancels a debt of $25,000, what amount must Suma recognize as income?

a. $0

b. $10,000

c. $15,000

d. $25,000

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Accounting Basics: Recognizing the income problem
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