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QveST [7]
3 years ago
15

Dole, the sole owner of Enson Corp., transferred a building to Enson. The building had an adjusted tax basis of $35,000 and a fa

ir market value of $100,000. In exchange for the building, Dole received $40,000 cash and Enson common stock with a fair market value of $60,000. What amount of gain did Dole recognize?
A. $0
B. $65,000
C. $40,000
D. $5,000
Business
1 answer:
faust18 [17]3 years ago
4 0

Answer:

C. $40,000

Explanation:

For computing the amount of the gain recognized, first we have to calculate the gain recognized based on the adjusted basis

= Cash received + fair market value of the stock - adjusted cash basis

= $40,000 + $60,000 - $35,000

= $100,000 -$35,000

= $65,000

But the cash is received for $40,000. So, only $40,000 of gain would be recognized. As in the case of transfer, if the amount is received other than the stock so the amount which is received is recognized as a gain i.e $40,000

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3 years ago
At the equilibrium level of income in the Keynesian model, which of the following statements is nottrue?
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Answer:

c. There are more unemployed resources.

Explanation:

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A companys management team should give serious consideration to bidding for a private label footwear contract in a particular ge
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A company’s management team should give serious consideration in bidding for a private label footwear contract in a geographic region when the company’s production capacity in one or more geographic regions exceed or else be idle because the number of pairs of branded footwear is below full production capacity based on the company managements planned to be produce.


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3 years ago
Interest rates and decisions
svetoff [14.1K]

Answer:

a. No, the firm needs to take the volatility of short-term rates into account.

Explanation:

Short term interest rates are more volatile than the long term interest rates. If the company chooses to finance its operations solely from short term financing than it will need to incorporate the affect of volatility in the short term interest rates to identify the net returns. The volatility should be calculated with the risk factor and required rate of return of the funds.

4 0
3 years ago
On December 31, Leann Corp. paid $5,120 on an installment note that requires annual payments. The outstanding loan balance on Ja
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Answer:

Dr Interest expense  $4,000

Dr Notes payable      $1,120

Explanation:

The $5,120 repaid comprised of both interest and principal repayments,hence there is need for the amount to be split into the two appropriate accounts.

The interest payable on the loan on yearly basis ,based on the outstanding loan balance of $50,000 is $4,000(8%*$50,000),hence the balance of $1,120($5,120-$4,000) represents the actual repayment of principal,as a result the notes payable account should be debited with $1,120.

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3 years ago
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