Marjorie Starts a New Consulting Business Out of Her Home

Multiple Choice

Marjorie starts a new consulting business out of her home. She converts her personal computer, which cost $3,400, to business use when it is worth $1,200. Which of the following is correct?
I.The initial basis for determining a gain on the sale of the computer is $1,200.
II.The basis for depreciation purposes is $1,200.
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A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements are correct.
D) Neither statement is correct.