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Lana71 [14]
3 years ago
11

Broom Corporation transfers assets with an adjusted basis of​ $300,000 and an FMV of​ $400,000 to Docker Corporation in exchange

for​ $400,000 of Docker Corporation stock as part of a taxminusfree reorganization. The Docker stock had been purchased from its shareholders one year earlier for​ $350,000. How much gain do Broom and Docker Corporations recognize on the asset​ transfer?
Business
2 answers:
Helen [10]3 years ago
7 0

Answer:

Niether of the party to contract earned any gain on this investment

Explanation:

The reason is that the both companies exchanged assets whose Fair Market value was equal to the amount received. This is because the Baron Corporation would would had written down its asset at FMV which means the asset is sold at a price that actually costs the Broom Corporation if it uses the asset for its rest of the life. Furthermore, the Docker will also not recognize any gain on the stock repurchased sold because it is not permitted in the accounting standard.

sertanlavr [38]3 years ago
7 0

Answer:

Both Broom and Docker Corporation have zero gains

Explanation:

The price Broom corporation sold it asset is will be detrimental, this is because the price that Broom corporation sold it asset will costs Broom corporation if it wants to use it assets and the cost well be for the rest of their life. Also as we can see, Docker corporation will not have any gain on the stock repurchased sold this is so, because in accounting standard, it is not permitted. The two corporation assets that were exchange by companies has equal or fair Market value which was equal to the amount both of them received.

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Qs 20-13 manufacturing: direct materials budget lo p1 miami solar manufactures solar panels for industrial use. the company budg
Helen [10]

Calculation of Direct Material Budget for the month of July:

Budgeted production (Units) for July 5,000

Material required per unit (pounds) 3

Material requirement for July (pounds) = (5000 units * 3 pounds) 15,000

Add: Ending material inventory (5300 units * 3 pounds* 30%) 4,770

Less: Beginning material inventory 4,500

Direct Material Purchase (Pounds) (15000+4770-4500) = 15,270

Cost per pound of Metrial ($) $6.00

Direct Material Purchase ($) (15270 pounds * $6) = $91,620

7 0
3 years ago
On January 3, 2019, Carey discovers his diamond bracelet has been stolen. The bracelet had a fair market value and adjusted basi
Mama L [17]

Answer: $1,900

Explanation:

Theft loss deduction is calculated by adjusting the fair market value of the asset for a theft loss floor limitation of $100 and 10% of the person's AGI.

Theft loss deduction is:

= Fair value -Theft floor limitation - 10% of AGI

= 7,000 - 100 - (10% * 50,000)

= $1,900

3 0
3 years ago
4. Which of the following is an example of ethical behavior by an inspector?
Viktor [21]
C refusing to share information
3 0
3 years ago
The Wet Corp. has an investment project that will reduce expenses by $25,000 per year for 3 years. The project's cost is $20,000
Jlenok [28]

Answer:

c. $20,416.50

Explanation:

Cost of assets = 20,000

Depreciation year 1 = 33% * 20,000 = $6,666

Annual cost saving = 25,000

Tax rate = 25%

Operating cash flow Year 1 = Cost saving*(1 - tax) + Tax*Depreciation

Operating cash flow Year 1 = 25,000*(1-0.25) + 0.25*6,666

Operating cash flow Year 1 = 25,000*0.75 + 0.25*6,666

Operating cash flow Year 1 = 18750 + 1666.5

Operating cash flow Year 1 = $20,416.5

So, the cash-flow from the project in year 1 is $20,416.50

8 0
2 years ago
Suppose two projects have the same expected business value. Project A has a very high estimated business value along with a high
never [62]

Answer:

Project B has a much lower estimated business value along with a low probability of failure.

Explanation:

  • In order to do only one type of project that has the same business values. I would choose a project that has a low probability of failure.
  • Though it has a low value but in the long run will lead to economic profit and shareholders value. For selection, we need to find out the benefits gained by the project.
7 0
2 years ago
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