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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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When creditors, managers, and investors look at expenses as a percentage of revenue, they are __________.
sineoko [7]

Answer:

Doing a financial statement analysis.

Explanation:

Financial statements can be defined as a document used for the formal communication or disclosure of financial information and statements to present and potential users such as investors and creditors. These includes balance sheet, statement of retained earnings and income statement.

Financial statement analysis can be defined as the process of analyzing, estimating and reviewing the financial statements of a business firm or organization in order to make better economic decisions and profits in the future.

Hence, when creditors, managers, and investors look at expenses as a percentage of revenue, they are doing a financial statement analysis.

7 0
2 years ago
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rjkz [21]

Answer:

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3 years ago
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chubhunter [2.5K]

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22%    :)

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3 years ago
Boise Timber co. computes its break-even point strictly on the basis of cash expenditures related to fixed costs. Its total fixe
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Explanation:

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8 0
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