A group of employees in American Game Technology Inc., a manufacturer of gaming machines, got together to arrange a paper recycl
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Answer: Gwen should report a $3,000 long-term capital gain in her income tax return.
In this question the price paid by Gwen’s mother for the shares is irrelevant because of her death.
The stock’s fair market value ($20) when Gwen inherited the shares (21st October 2015) is Gwen stepped up value.
Gwen’s gain from selling the shares is:
Gwen inherited the shares on (21st October 2015) and held the shares until (3rd july 2017), so she held the shares for more than one year after inheriting it. So, she will report a long-term capital gain on her income tax return.
Answer and Explanation:
The Preparation of bank reconciliation for Cougar Corp. as of December 31 is shown below:-
<u>Cougar Corp.</u>
<u>Bank reconciliation</u>
<u>For the year ended December 31</u>
<u>Particulars Amount</u>
Bank balance Dec 31 $24,575
Add: Deposit in transit $2,500
Less:
Outstanding checks #302 ($180)
Outstanding checks #303 ($95)
Outstanding checks #304 ($25) ($300)
Bank balance adjusted $26,775
Cash balance on 31 Dec $26,504
Add: EFT from customer $1,700
Add: Interest income $21 $1,721
Less: Posting error
($5,400 - $4,500) $900
Less: NSF check $500 $1,400
Book balance adjusted $26,775
Hence, the bank balance and the book balance are matched
