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USPshnik [31]
3 years ago
6

The stock of Lavender Corporation is held as follows: 80% by Jade Corporation (basis of $400,000) and 20% by Tiffany (basis of $

100,000). Lavender Corporation is liquidated in December of the current year, pursuant to a plan adopted earlier in the year. Pursuant to the liquidation, Lavender Corporation distributed Asset A (basis of $600,000, fair market value of $900,000) to Jade, and Asset B (basis of $250,000, fair market value of $225,000) to Tiffany. No election is made under § 338. With respect to the liquidation of Lavender:
(A) Lavender recognizes a loss of $25,000 on the distribution of Asset B.
(B) Jade has a basis in Asset A of $900,000.
(C) Tiffany has a basis in Asset B of $225,000.
(D) Jade recognizes a gain of $500,000.
(E) Lavender recognizes a gain of $300,000 on the distribution of Asset A.
Business
1 answer:
hodyreva [135]3 years ago
6 0

Answer:

C) Tiffany has a basis in Asset B of $225,000.

Explanation:

Tiffany's basis in asset B is equal to the fair market value of the asset = $225,000.

When distributions are made from a subsidiary corporation to a minority shareholder, pursuant to a liquidation, the corporation can only recognize gains, but not losses. Therefore Lavender cannot recognize the $25,000 loss on the distribution of asset B to Tiffany (= $225,000 - $250,000).

Also, Jade Corporation (the parent company) does not recognize any loss or gain on the distribution, and has a basis of $600,000 in asset A which equals the Lavender's basis for the asset.

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Your firm is thinking about investing ​$200 comma 000200,000 in the overhaul of a manufacturing cell in a lean environment. Reve
Zepler [3.9K]

Answer:

EAW = -$17,545.71

Explanation:

initial investment = $200,000

cash inflows;

  • Year 1 = $33,000
  • Year 2 = $44,000
  • Year 3 = $55,000
  • Year 4 = $66,000
  • Year 5 = $77,000
  • Year 6 = $88,000
  • Year 7 = $99,000
  • Year 8 = $110,000
  • Year 9 = $132,000

cash outflows:

  • Year 1 = $20,000
  • Year 2 = $30,000
  • Year 3 = $40,000
  • Year 4 = $50,000
  • Year 5 = $60,000
  • Year 6 = $70,000
  • Year 7 = $80,000
  • Year 8 = $90,000
  • Year 9 = $100,000

EAW = equivalent annual worth = equivalent annual benefits - equivalent annual costs

to determine the EAB we must first find the PV of the cash inflows using a financial calculator = $408,348.84

EAB = (PV x r) / [1 - (1 + r)⁻ⁿ] = ($408,348.84 x 10%) / [1 - (1 + 10%)⁻⁹] = $70,905.91

to determine the EAC we must first find the PV of the cash outflows (including initial outlay) using a financial calculator = $509,395

EAC = (PV x r) / [1 - (1 + r)⁻ⁿ] = ($509,395 x 10%) / [1 - (1 + 10%)⁻⁹] = $88,451.62

EAW = $70,905.91 - $88,451.62 = -$17,545.71

5 0
3 years ago
Preparing a Schedule of Cash Collections on Accounts Receivable Kailua and Company is a legal services firm. All sales of legal
VMariaS [17]

Answer: $81,060 in August and $80,850 in September

Explanation: Please find attached a table.

August 86,800 17,360 38,500 25,200 81,060

September 91,000 18,200 43,400 19,250 80,850

8 0
3 years ago
Frank purchased his house 16 years ago by taking out a 25-year mortgage for $150,000. the mortgage has a fixed interest rate of
Andrej [43]
The current value of the mortgage will be given by:
A=P(1+r/100)^n
where:
P=$150,000
r=5%
n=16 years
therefore:
A=150000(1+5/100)^16
A=150000(1.05)^16
A=$201,014.35
If He wants to pay off his mortgage now, he needs $201,014.35
4 0
3 years ago
Read 2 more answers
Journalize the following transactions for Cullumber Company.
Thepotemich [5.8K]

Answer and Explanation:

The journal entries are shown below

On Sept 1

Supplies Dr $1,020

    To Cash $1,020

(being supplies purchased in cash)

On Sept 5

Dividend Dr $410

   To cash $410

(being cash dividend is paid)

On Sept 7

cash Dr 5,500

   To Unearned service revenue  $5,500

(being cash collection is recorded)

On Sept 16

Cash Dr $770

  To Account receivable $770

(being cash collection is recorded)

On Sept 22

Equipment Dr $3,000

         To cash $1,100

         To Note payable $1,900

(being equipment purchased is recorded)

3 0
3 years ago
Harrison Corp. wants to raise its level of service to enhance customer experience. The board of directors sent out an email cont
romanna [79]

Answer:

Downward communication

Explanation:

Downward communication in a formal structure is the flow of information in terms of orders, appreciation, encouragement from higher authority to subordinates across the organization.

Upward communication in the form of feedback and problems flow from lower level employees to upper level. Here, the board of directors are top level employees who have passed the message to the employees to raise the level of service. This is a form of downward communication.

4 0
3 years ago
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