a. All gains and losses from Section 1231 assets are treated as capital gains and capital losses. b. Inventory is always a Section 1231 asset since it is used in a trade or business. c. All of the given answers are false. d. A depreciable asset cannot be a Section 1231 asset. e. If a taxpayer owns a copyright, it will be treated as a Section 1231 asset since it was created for the production of income.

Gamegirl inc., has the following transactions during august. august 6 sold 76 handheld game devices for $230 each to ds unlimited on account, terms 2/10, net 60. the cost of the 76 game devices sold, was $210 each. august 10 ds unlimited returned six game devices purchased on 6th august since they were defective. august 14 received full amount due from ds unlimited. required: prepare the transactions for gamegirl, inc., assuming the company uses a perpetual inventory syste