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andrezito [222]
3 years ago
6

Taxation of Business Entities, 2016 edition7-65.) Wolverine Corporation made a distribution of $500,000 to Jim Har Inc. in par-t

ial liquidation of the company on December 31 of this year. Jim Har Inc. owns 100 percent of Wolverine Corporation. The distribution was in exchange for 50 percent of Jim Har Inc.’s stock in the company. At the time of the distri-bution, the shares had a fair market value of $200 per share. Jim Har Inc.’s in-come tax basis in the shares was $50 per share. Wolverine had total E&P of $8,000,000 at the time of the distribution.a.) What is the amount and character (capital gain or dividend) of any income or gain recognized by Jim Har Inc. as a result of the partial liquidation?b.) Assuming Wolverine made no other distributions to Jim Har Inc. during the year, by what amount does Wolverine reduce its total E&P as a result of the partial liquidation?
Business
1 answer:
marusya05 [52]3 years ago
5 0

Answer:

a. Dividend

b. $500,000

Explanation:

a. As in the given case, the character of any income or gain recognized is the dividend of $500,000 which eligible him to avail 100% deduction of the dividend amount

b. The reduced amount would be lower of the distributed amount or 50% of Total E&P

Distributed amount is $500,000

And, the 50% of total E&P is =  $8,000,000 × 50% = $4,000,000

So, the lesser amount is $500,000 which is reduced its total E&P

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The following cash transactions occurred during the period. INTEREST RECEIVED IN CASH $18,000
nikklg [1K]

Answer:

OPERATING ACTIVITIES

SOURCES: INTEREST RECEIVED IN CASH $18,000, the company receives money

(USES:) PAYMENT OF WAGES TO EMPLOYEES $35,000, the company pays wages

INVESTING ACTIVITIES

SOURCES: NONE

(USES:) PURCHASE OF A PIECE OF EQUIPMENT FOR CASH $120,000  , the company pays for the equipment

FINANCING ACTIVITIES

SOURCES: NONE

(USES:) DISTRIBUTION OF CASH DIVIDEND DECLARED LAST YEAR $25,000, the company pays dividends

5 0
2 years ago
There are 5 steps involved when defining a project; which of the following is the second?
const2013 [10]

Answer:

Establish project priorities

Explanation:

Option (c) Establish project priorities

The Establish project priorities helps in the smooth running of the project.

It deals with assigning the tasks involved in the project priorities. The priorities are assigned on the basis of the importance, resources required by the particular task, its effect on overall completion time of the project etc.

8 0
3 years ago
Which two of these rules could be included in a company’s acceptable use standards?
Dmitry_Shevchenko [17]
It would be, B and E.
7 0
3 years ago
Read 2 more answers
Paul has budgeted to pay $80 each month on his credit card which has a $2,818 balance and has an annual finance rate of 15.9%. H
Mashcka [7]

Answer:

time = 4 year

Explanation:

given data

pay each month =  $80  

Credit card balance = $2,818

annual finance rate = 15.9%

solution

we get here time period that is express by as

Monthly payment = \frac{(P \times \frac{r}{12}) \times (1+ \frac{r}{12})^t }{(1+\frac{r}{12})^t-1}     ............1

put here value and we get

80 =  \frac{(2818 \times \frac{0.159}{12}) \times (1+ \frac{0.159}{12})^t }{(1+\frac{0.159}{12})^t-1}    

solve it we get time t

t = 48 month

time = 4 year

 

4 0
3 years ago
Your boss never gives you the benefit of the doubt. When you arrived late from lunch, he assumed that you had simply taken too m
Savatey [412]

Answer:

Your boss is guilty of Fundamental attribution error (C)

Explanation:

Fundamental attribution error is our tendency to explain someones behaviour based on internal factors such as personality while underestimating the effect external factors have such as situational influences.

4 0
2 years ago
Read 2 more answers
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