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hram777 [196]
3 years ago
14

ABC Corporation distributes property to its sole shareholder, Andre. The property has a fair market value of $350,000, an adjust

ed basis of $205,000, and is subject to a liability of $220,000. Current E & P is $500,000. With respect to the distribution, which of the following statements is correct? ABC has a gain of $15,000 and Andre has dividend income of $350,000 ABC has a gain of $145,000 and Andre’s basis in the distributed property is $130,000. ABC has a gain of $130,000 and Andre’s basis in the distributed property is $350,000 ABC has a gain of $145,000 and Andre has dividend income of $130,000 None of the above
Business
1 answer:
saul85 [17]3 years ago
8 0

Answer:

ABC has a gain of $145,000 and Andre's dividend income is $130,000

Explanation:

Property ABC issued, has the following:

fair market value = $350,000

Adjusted basis = $205,000

Liability = $220,000

Calculate ABC's Corporation gain:

Gain = market value - Adjusted basis

= $350,000 - $205,000

= $145,000

ABC has a gain of $145,000

Calculate Andre's dividend income since he is the sole shareholder:

Dividend earnings = fair market value - liability

= $350,000 - $220,000

= $130,000

Andre's dividend income is $130,000

Correct option is D.

With respect to distribution, ABC has a gain of $145,000 and Andre's dividend income is $130,000

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The Florence County Museum called a press conference to inform the public of the need for major repairs to prevent water damage
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6 0
3 years ago
marks corporation has two operating departments, drilling and grinding, and an office. the three categories of office expenses a
Scorpion4ik [409]

The correct answer is $35750

The amount of depreciation that should be allocated to drilling for the current period is $35750

<h3>How does depreciation work?</h3>

Depreciation is the process of subtracting the entire cost of an expensive item you purchased for your company. However, you write off portions of it over time rather than completing it altogether in one tax year. Depreciating assets gives you more control over your budget because you may schedule how much money is written off annually.

<h3>How much depreciation should be devoted to drilling throughout the current time frame?</h3>

Office costs: Salaries are $30,000, depreciation is $20,000, and advertising is $40,000. The total number of employees for drilling and grinding is 2500.

The overall net sales for drilling are 375 000, for grinding they are 450 000.

Drilling costs are 75,000, grinding costs are 125,000, and overall costs are 200000.

then,

Salaries: $30,000×\frac{1000}{2500}=$12,000

Depreciation: $20,000×\frac{75000}{200000}=$7,500

Advertising: $40,000×\frac{325000}{800000} =$16,250

Total $35,750

To know more about depreciation work visit:

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question options are wrong the correct question is:

marks corporation has two operating departments, drilling and grinding, and an office. the three categories of office expenses are allocated to the two operating departments using different allocation bases. the following information is available for the current period: office expenses total allocation base salaries $ 30,000 number of employees depreciation 20,000 cost of goods sold advertising 40,000 percentage of total sales department number of employees sales cost of goods sold drilling 1,000 $ 325,000 $ 75,000 grinding 1,500 475,000 125,000 total 2,500 $ 800,000 $ 200,000 the amount of depreciation that should be allocated to drilling for the current period is: multiple choice $25,000. $12,500. $7,500. $20,000. $35750. this is a correct option.

8 0
1 year ago
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