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Leno4ka [110]
3 years ago
11

The stock of Cooper Corporation is​ 70% owned by Carole and​ 30% owned by​ Carole's brother, Chris. During​ 2017, Chris transfer

red property​ (basis of​ $100,000 and FMV of​ $120,000) as a contribution to the capital of Cooper. During February​ 2018, Cooper adopted a plan of liquidation and subsequently made a pro rata distribution of the property back to Carole and Chris. At the time of the​ liquidation, the property had an FMV of​ $80,000. What amount of loss can be recognized by Cooper on the distribution of​ property?
Business
1 answer:
g100num [7]3 years ago
6 0

Answer:

$0

Explanation:

Since 100% of Cooper Corporation's stock were owned by Carole and Chris (who are siblings), then no one can recognize any loss or gain from the contribution of property (nor the distribution of property). Under section 351, no gain or loss can be recognized for the contribution of property in exchange for stocks in a controlled corporation.

Since the contribution was made through a carryover basis transaction less than 5 years before the liquidation, the distribution is carried out in the same way.

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For the first time in two years, Big G (the cereal division of General Mills) raised cereal prices by 4 percent. If, as a result
jeka94

Answer:

the coefficient of elasticity is 1.25. therefore demand is elastic

Explanation:

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.

Price elasticity of demand = percentage change in quantity demanded / percentage change in price

5% / 4% = 1.25

If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.  

Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one

Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded

5 0
3 years ago
To graduate from high school, which diploma is better? IB (international bachelors) or AP (advanced placement)?
liraira [26]

Answer:

I am in the IB program, and personally I think that it better prepared you for college compared to AP. It is known for college preparation and I know someone who had an easy time in college due to it. But both are good on your record, AP is definitely easier as you can choose what classes you'd like

6 0
2 years ago
Bloom Corporation purchased $1,000,000 of Taylor Company 5% bonds at par with the intent and ability to hold the bonds until the
VashaNatasha [74]

Answer:

1)

Since Bloom plans to sell the bonds, it must record the entire loss as credit loss (loss on sale of bonds)

Dr Other than temporary impairment loss 400,000

    Cr Discount on bond investment - Taylor bonds 400,000

Credits losses must be recognized as a loss in earnings in the income statement.

2)

Journal entry to record credit loss:

Dr Other than temporary impairment loss 250,000

    Cr Discount on bond investment - Taylor bonds 250,000

Journal entry to record non-credit loss:

Dr Other than temporary impairment loss 150,000

    Cr Fair value adjustment - Taylor bonds 150,000

Non-credit losses must be recognized as part of other comprehensive income/loss and must be disclosed separately than credit losses. They must be reported in the balance sheet (they lower retained earnings directly), not the income statement.

3 0
2 years ago
Suppose that real GDP is currently ​$13.55 trillion and potential real GDP is​ $14.0 trillion, or a gap of ​$500500 billion. The
Georgia [21]

Answer:

$100 billion

Explanation:

Real GDP is currently = ​$13.55 trillion

Potential real GDP =​ $14.0 trillion

Gap = ​$500 billion

Government purchases multiplier = 5.0

Tax multiplier = 4.0

To increase aggregate demand by $500 billion, the required increase in government expenditure is:

= (1 ÷ government purchases multiplier) × change in aggregate demand

= (1 ÷ 5) × $500

= $100 billion

Therefore, the government expenditure need to be increased by $100 billion.

6 0
3 years ago
Digg Co. installs a manufacturing machine in its factory at the beginning of the year at a cost of $36,000. The machine's useful
Nastasia [14]

Answer:

Annual depreciation (year 1)= $1,400

Explanation:

Giving the following information:

Buying price= $36,000.

Useful units= 300,000 units of product.

Salvage value= $6,000

During its first year, the machine produces 14,000 units of product.

To calculate the depreciation expense for the first year under the units of production method, we need to use the following formula:

Annual depreciation= [(original cost - salvage value)/useful life of production in units]*units produced

Annual depreciation= [(36,000 - 6,000)/300,000]*14,000

Annual depreciation= 0.1*14,000= $1,400

3 0
3 years ago
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