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alexdok [17]
3 years ago
8

Small Company was liquidated in the current year by Parent Company, its sole shareholder. Parent received the following assets o

n June 15 pursuant to the liquidation: Basis to Fair Small Market Value Cash $100,00o$100,000 Accounts receivable 40,000 40,000 Plant assets (net) 70,000 90,000 Land (mortgage on land $40,000)90,000 110.000 Total $300,00o$340,000 Also pursuant to the liquidation, Parent assumed the mortgage of $40,000 on the land. Parent Corporation's basis in Small common stock is $205,00O. What are the amount and the character of the gain or loss Parent must recognize from the liquidation? $95.000 capital gain. KE $135.000 capital gain. IN $340.000 dividend
Business
1 answer:
zlopas [31]3 years ago
6 0

Answer:

$95,000 Capital Gain

Explanation:

First, note that during liquidation, the fair market value should be used for the valuation of assets

<u>Step 1: Calculate the Net Assets taken over at Fair Market Value</u>

Total Assets at the Market Value = $340,000

Subtact: Liabilities (land Mortgage) = ($40,000)

The Net Asset at Fair market value = $300,000

Step 2: Calculate the Capital Gain  or loss from the Liquidation

fair Value of Net Assets Taken Over              = $300,000 (from step 1)

Subtract: The Common stock of Small Com. = ($205,000)

The Capital Gain                                              = $95,000

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Information-based industries are most susceptible to which one of Porter’s five forces?
nasty-shy [4]
The right answer for the question that is being asked and shown above is that: "a. rivalry among existing firms in an industry" Information-based industries are most susceptible to one of Porter’s five forces which is the a. rivalry among existing firms in an industry

7 0
3 years ago
Timmy can edit 2 pages in one minute and he can type 80 words in one minute. Olivia can edit 1 page in one minute and she can ty
RUDIKE [14]

Answer:

True

Explanation:

A person has comparative advantage in production if he produces at a lower opportunity cost when compared with other people.

A person has absolute advantage in the production of a good or service If he produces more quantity of the good when compared with other people

To calculate comparative advantage, first find the opportunity cost:

Opportunity cost of timmy editing = 80/2=40 words

Opportunity cost of timmy typing = 2 / 80 = 0.025

Opportunity cost of oliva editing = 100/1= 100

Opportunity cost of oliva typing = 1/100=0.01

Olivia has a comparative advantage in typing while timmy has a comparative advantage in editing.

Olivia types more words than timmy, therefore she has an absolute advantage in typing.

Timmy edits more pages than oliva, Therefore, he has am absolute advantage in editing.

I hope my answer helps you

7 0
3 years ago
Kristi sells purses. Her cost is $35 per purse. On a certain day, she sells 12 purses, and her producer surplus for that day amo
aleksandrvk [35]

Answer:

$50

Explanation:

The computation of the selling  price of each purse is shown below:

As we know that

Selling price = Total value ÷ number of purses sold

where,

Total value is

= Cost of the purse × number of purses sold + producer surplus

= $35 × 12 purses + $180

= $600

And, the number of purses sold is 12

So, the selling price of each purse is

= $600 ÷ 12 purses

= $50

4 0
3 years ago
The mining and export of minerals and precious stones is very important part of the Namibian economy. It was reported that despi
Nutka1998 [239]

Answer:

The minerals and precious stones would be part of the current account, which is one of the three components of the balance of payments, the other two being the capital account and the financial account.

Explanation:

The current account includes income transfers, current transfers, the balance in the trade of services, and the balance in the trade of goods. The export value of minerals and precious stones would more specifically be in the balance of the trade of goods, simply because minerals and precious stones are classified as economic goods.

4 0
3 years ago
What is the purpose of reporting comprehensive income?A. To provide a consolidation of the income of the firm's segments.B. To r
jek_recluse [69]

Answer:

Option D                  

Explanation:

Comprehensive earnings reporting is intended to provide a summary of all adjustments in a corporation's equity arising from acknowledged exchanges as well as other time commercial activities other than dealings with holders in their capacities as shareholders.

If included with the fiscal reports with associated reports and other details, the details generated by disclosing detailed income will assist stakeholders, lenders as well as others in determining the operations of a business, and the duration and extent of potential cash streams of a business.

6 0
4 years ago
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