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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.

You might be interested in
Larry Nelson holds 1,000 shares of General Electric (GE) common stock. As a stockholder, he has the right to be involved in the
Leto [7]

Answer:

b.True

Preferred Stock as their name suggest comes first in the dividend distribution.

If it makes no <u>purchase of the new shares </u>then, their investment will decrease to $76,800 as the market value no longer is $48 per share

This is an example of dilution that is, the decrease in both, business participation and also, value of the investment as new shares are issued the older investor will take a hit in their participation if they don't purchase additional shares in the new issuances

Explanation:

2,000 shares x $38.40 = 76,800

3 0
3 years ago
In a results oriented organization that focuses on quality and teamwork, which level of organizational structure should assume p
SOVA2 [1]

In a results-oriented organization that focuses on quality and teamwork, followers should assume primary responsibility.

<h3><u>Explanation:</u></h3>

The thing that `guides the activities to be carried out for achieving the objectives and goals of an organisation refers to the organisational structure.The activities can include things like role,rules and responsibilities. The organisational structure plays a major roil;e in the determination  of  how well an organisation can achieve its goals.

The structure that an organisation must follow is dictated by the top management. The organisational structure decides the flow of information into various levels of an organisation. When an organisation focuses mainly on the outcome that is achieved finally without focusing on the way the outcome is reached refers to result oriented organisation. Thus, in such organisation, the followers should assume primary responsibility.

7 0
4 years ago
For the year, Redder Company has cost of goods manufactured of $600,000, beginning finished goods inventory of $200,000, and end
nevsk [136]

Answer:

finished cost = $200,000

inventory cost=$250,000

manufactured cost= $600,000

cost of good= beginning inventory+purchase during period cost- ending inventory

$600,000+$200,000-$250,000

$550,000

7 0
3 years ago
When is a contingent liability recorded? a) When the amount car be reasonably estimated. b) When the future events are probable
anastassius [24]

Answer:

The answer is B.

Explanation:

Contingent liability is a liability that may occur in the future subject to the outcome of a specific event. The future outcome determines contingent liability. Examples of contingent liability are product warranties, pending court case etc.

So contingent liability should be recognized when the future events are probable to occur and the amount can be reasonably estimated

8 0
3 years ago
delivery truck at a cost of $31,000 on January 1, 2017. The truck is expected to have a salvage value of $4,000 at the end of it
ollegr [7]

Answer:

Annual depreciation for the first year = $15,500

Annual depreciation for the second year = $7,500

Explanation:

Data provided in the question;

Cost of the delivery truck = $31,000

Salvage value = $4,000

Useful life = 4 years

Now,

The Rate of depreciation under declining-balance = 2 × straight-line rate

= 2 × \frac{1}{4}

= 0.5

or

= 0.5 × 100% = 50%

Therefore,

Annual depreciation for the first year = cost of truck × Rate of depreciation

= $31,000 × 0.5

= $15,500

Annual depreciation for the second year

= Book value at the end of first year of truck × Rate of depreciation

= $15,500 × 0.5

= $7,500

5 0
3 years ago
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