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ollegr [7]
3 years ago
8

Quinlan has ample E & P to cover any distributions made during the year. One distribution made to a shareholder consists of

property with an adjusted basis of $536,200 and a fair market value of $321,720. What are the tax consequences of this distribution to Quinlan? If an amount is zero, enter "0". As a result of the distribution, Quinlan Corporation has a realized of $ of which $ is recognized. The shareholder received property with a basis of $
Business
1 answer:
stepladder [879]3 years ago
6 0

Answer:

1.Quinlan distribution has realized a loss of

$214,480 of which $0 is recognized.

2. The shareholder received property with a basis of $321,720

Explanation:

1.

When property is been said to be distributed to shareholders the amount of dividend equal to the fair value of the said property which is $321,720 on the date of the distribution. Therefore the amount of taxable dividend is $321,720 which is before the dividends received deduction.

Therefore;

Net loss which shall not be allowed ($536,200-$321,720)

=$214,480

Quinlan distribution has realized a loss of

$214,480 which is not allowed to be recognized

2. Adjusted basis of the property distributed is $321,720

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Answer:

Value of the lease = Annual lease payments * PVAD (11%, 13)

Value of the lease = $102,771 * 7.492236

Value of the lease = $770,000

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Jan. 1     Leased Asset - Airplane                770000

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Jan. 1     Lease Liability                                 102771

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Dec. 31    Interest Expense                            73395

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                     Interest  Payable                                        73395

Dec 31.   Depreciation Expenses                  40,000

               (600,000/15 years)

                       Accumulated Depreciation                     40,000

5 0
3 years ago
A single taxpayer earns $500,000 of salary income and $20,000 of interest income in 2019. The taxpayer is a material participant
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Answer:

$220,000,

Explanation:

Given that:

  • $500,000 of salary income
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So the total income of the taxpayer is: $500,000 + $20,000 = $520,000

As we know that, AGI (Adjusted gross income) is used to calculate how much income of a taxpayer is taxable. They are expenses incurred by the earner which are deducted before taxing.

In this situation, his share of the partnership's loss for the year is $300,000, so the taxpayer will report an AGI of:

$520,000  -  $300,000

=  $220,000

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6 0
3 years ago
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Suppose that XYZ Company hires labor and capital in competitive input markets. Assume that labor costs $200 per day and that a u
GuDViN [60]

Answer:

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The condition for the cost minimization of a firm is as follows:

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Where:

MRPL = Labor's marginal product = 40

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b) If the daily wages were to increase, explain the long run adjustments that the firm would likely make in response to the wage increase.

If the daily wages were to increase, the MRPL / w in equation (1) in part a above will fall and we will have:

MRPL / w < MRPC / r …………………… (2)

Since equation (2) is no longer consistent with equation (1), the firm is NOT minimizing the cost of current production.

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Answer:

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And

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                 Cash                           $ 1000 (credit)

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              Long Term  Investment            $ 3000 (credit)

6.     Cash                    $ 20,000  (debit)

                Sales                        $ 20,000        ( credit)

7.       Inventory           $2000 (debit)

            Cash                      $ 2000  (credit)

8.      Investment                 $ 6000 ( debit)

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Answer: E

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3 years ago
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