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cluponka [151]
3 years ago
5

A corporation distributes a piece of personal property to a shareholder, in complete liquidation. The corporation had a basis of

$40,000. The property's FMV is $30,000. The effect to the corporation is_____________.
Business
1 answer:
Rudiy273 years ago
5 0

Answer:

The corporation must recognize a $10,000 loss.

Explanation:

The last activity that a corporation must perform upon liquidation is to distribute property, assets or cash to its shareholders. The adjusted basis for any property or assets handed out in a complete liquidation is the fair market value of the property or assets.

In this case, the corporation's property had a basis of $40,000 but a fair market value of $30,000, so the distribution was done using the fair market value of $30,000.

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Chang Industries has 1,300 defective units of product that already cost $48 each to produce. A salvage company will purchase the
dolphi86 [110]

Answer: Sunk Cost

Explanation:

A sunk cost is an expense which a company or entity has already incurred and which cannot be recovered and so should not be considered when making decisions regarding incremental benefits or costs to an investment.

The $48 had already been incurred to produce the defective units and cannot be recovered so it is a sunk cost that should not be considered moving forward.

7 0
3 years ago
King Nothing is evaluating a new 6-year project that will have annual sales of $410,000 and costs of $284,000. The project will
motikmotik

Answer:

Option (a) is correct.

Explanation:

Given that,

Sales = $410,000

Costs = $284,000

Depreciation Expense =  $510,000 × 0.1920]

                                     = $97,920

Therefore,

Operating Cash Flow:

= [(Sales - Variable Costs - Fixed Costs) × (1 - Tax Rate)] + [Depreciation × Tax Rate]

= [($410,000 - 284,000) × (1 - 0.35)] + [$97,920 × 0.35]

= [$126,000 × 0.65] + [$97,920 × 0.35]

= $81,900 + $34,272

= $1,16,172

7 0
3 years ago
A clothing store sends out messages to cell phones of loyal customers informing them about offers. What can be a probable reason
aliina [53]

Answer:

c

Explanation:

8 0
3 years ago
Read 2 more answers
Alpha has $40,000 of capital per worker, while Beta has $5,000 of capital per worker. In all other respects, the two countries a
VladimirAG [237]

Answer:

<u>lower return </u>

Explanation:

an additionl unit of capital will have a <u>lower return</u>  in Alpha compared to Beta

The diminishing return theory explains that if a factor is added, while the other remains the same, the return for each additional quantity added will be lower. So if both countries have the same amount of factor, Alpha adding more capital will not have the same return as doing it in Beta

ΔCapital/(40,000 + labor + land)  <   ΔCapital/(5,000 + labor + land)

That's because the divisor ir greater in Alpha it is required a higher amount of capital to produce the same return.

5 0
3 years ago
Corn chips and potato chips are substitutes. Good weather that sharply increases the corn harvest would a. increase consumer sur
yaroslaw [1]

Answer: Option(a) is correct.

Explanation:

Corn chips and potato chips, both are substitute goods and thus, affect each others demand by a small changes in various factors.

In this question, a good weather increases the harvesting of corn which increases the supply of corn chips.

This shifts the supply curve rightwards as a result price falls and quantity increases. Hence, this lower price, increases the consumer surplus in the market of corn chips.

This change in the supply of corn chips will affect the demand for potato chips in the potato chips market. So, the demand curve for potato chips shifts leftwards. This shift in the demand curve, reduces the price level and quantity level. Hence, this lowers the producer surplus in the market for potato chips.

6 0
3 years ago
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