ACC 456-Web Baker was hired three years ago by the Berry

Subject: Business    / Accounting
Question

Web Baker was hired three years ago by the Berry Corporation to serve as CEO for the company. As part of his employment contract, the corporation had agreed to purchase his residence at FMV in the event the company decided to fire him. Last year, Berry, unsatisfied with Webb’s performance, fired him and purchased the residence for $350,000. Berry immediately listed the house with a real estate agency. Soon after the purchase, the real estate market in the area experienced a serious decline, especially in higher-priced homes. Berry sold the house this year for $270,000 and paid selling expenses of $12,000. How should the Berry Corporation treat the $92,000 loss?