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Vladimir [108]
4 years ago
12

Earl and Mary form Crow Corporation. Earl transfers property, basis of $200,000 and value of $1,600,000, for 50 shares in Crow C

orporation. Mary transfers property, basis of $80,000 and value of $1,480,000, and agrees to serve as manager of Crow for one year; in return Mary receives 50 shares of Crow. The value of Mary's services is $120,000. With respect to the transfers:
a.Mary will not recognize gain or income.
b.Earl will recognize a gain of $1,400,000.
c.Crow will have a business deduction of $120,000 for the value of the services Mary will render.
d.Crow Corporation has a basis of $1,480,000 in the property it received from Mary.
e.None of these choices are correct.
Business
1 answer:
barxatty [35]4 years ago
4 0

Answer: The correct answer is "c.Crow will have a business deduction of $120,000 for the value of the services Mary will render.".

Explanation: With respect to the transfers: Crow will have a business deduction of $120,000 for the value of the services Mary will render.

This is calculated by the difference between the value of the property contributed by Earl $1 600 000 and the value of the property contributed by Mary $1 480 000.

1 600 000 - 1 480 000 = $ 120 000.

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pochemuha

Answer:

1. Several individuals operate the cash register using the same register drawer.  Weak Internal Control. <u>Establishment of Responsibility Internal control violated. </u>

Having many individuals have access to the cash register can lead to theft. Establishment of Responsibility is an internal control that calls for the minimal amount of people being able to do one task. This way issues can be traced faster.

2 .A monthly bank reconciliation is prepared by someone who has no other cash responsibilities.  Good Internal Control. <u>Independent Internal Verification control followed. </u>

Independent Verification occurs when a person who is an employee of a company but not related to a task, audits that task to find out if any irregularities are present. It ensures unbiased review.

3. Joe Cockrell writes checks and also records cash payment journal entries.  Weak Internal Control. <u>Segregation of Duties Internal control violated. </u>

Segregation of duty calls for the division of a job process into tasks that different people are to accomplish especially in relation to cash. It can help avoid fraud because people will not be able to approve payments for themselves which is what Joe Cockrell can do in this scenario. Joe can withdraw and decide not to record it.

4 .One individual orders inventory, while a different individual authorizes payments.  Good Internal Control. <u>Segregation of Duties Internal control followed. </u>

Segregation of duty calls for the division of a job process into tasks that different people are to accomplish especially in relation to cash. By having one individual order inventory and the other authorizing payments, fraud can be better avoided.

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Documentation procedures in a company ensure that the paper trail is efficiently recorded so that transactions can be followed up speedily. By sending unnumbered sales invoices to the Accounting department as well as taking so long to do so, the company is running an inefficient documentation process that will make tracking transactions more difficult.

3 0
3 years ago
assume the price of a product sold by a purely competitive firm is $5. given the data in the accompanying table, at what output
Anna35 [415]

The output level is total profit highest in the short run is 40 .

<h3>What is meant by short run ?</h3>

The idea of the short run states that some inputs will be constant while others will change over a specific period of time. It expresses the notion that an economy responds to particular stimuli differently depending on the amount of time it has to do so.

In the short run, certain production parameters are stable and some are flexible. Only by increasing the application of the variable factor can output be enhanced. The scale of manufacturing stays steady in the short term. The lengthy run is a time when all production factors are erratic.

To learn more about short run refer to :

brainly.com/question/24088447

#SPJ4

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Rashid [163]

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