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ASHA 777 [7]
3 years ago
5

Jermaine owns all 200 shares of Peach Corporation stock valued at $50,000. Kenya, a new shareholder, receives 200 newly issued s

hares from Peach Corporation in exchange for inventory with an adjusted basis of $40,000 and an FMV of $50,000. Which of the following statements is correct?
A.Kenya may defer the recognition of any tax until the stock is sold.
B.The transaction results in $10,000 of capital gain for Kenya.

C.The transaction results in $10,000 of ordinary income for Kenya.

D.No gain will be recognized by Kenya.
Business
1 answer:
Pie3 years ago
8 0

Answer:

C. The transaction results in $10,000 of ordinary income for Kenya.

Explanation:

Kenya has received 200 newly issued shares from Peach Corporation which worth $50,000 in exchange for inventory which valued at $40,000. There is ordinary income of $10,000 to Kenya. This income is not classified as capital gains because this income is not received by selling the shares.

The correct answer is C, transaction will result in $10,000 of ordinary income for Kenya.

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Your answer should be: "There is not enough information to answer." Hope I helped! :)
3 0
3 years ago
Smashed pumpkins co. Paid $200 in dividends and $624 in interest over the past year. The company increased retained earnings by
Maru [420]

Dividends that were paid last year = $200

Retained earnings = $522

Net Income = Retained earnings + Dividends paid = 200+522 =722

Tax rate was 38%.

Earnings before tax (EBT) = Net income/ (1-tax rate) =722/(1-0.38) = 1,164.52

Interest expense= 624

Earnings before interest and tax (EBIT) = EBT + interest expense = 1,164.52 + 624 = 1,788.52

Earnings before interest and tax (EBIT) = 1,788.52


3 0
3 years ago
A payday loan company charges 6.00 percent interest for a two-week period. What is the annual interest rate? (Do not round inter
Mashcka [7]

Answer:

The annual interest rate is 156  percent

Explanation:

If   6.00 percent interest for a two-week period then annual interest rate =

rate for a two-week period * (52 weeks/ 2 weeks)  = 0,06 * 26 = 1,56

1,56 * 100 =  156  percent for a year period

<u>Note</u>: One year have 52 weeks

8 0
3 years ago
Structural unemployment is caused by: Group of answer choices people losing a job when their skills become obsolete due to techn
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Structural unemployment is caused by <u>people losing a job when their skills become obsolete due to technological innovations.</u>

  • People who wish to work but are unable to obtain job are said to be experiencing structural unemployment. The abilities of the workers and the talents that businesses required do not match in structural unemployment.
  • Because the abilities of the workforce won't change despite advances in technology, if technological breakthroughs improve, there will be structural unemployment.
  • As a result of their inability to keep up with modern technology, they are losing their jobs.
<h2>What is Structural unemployment?</h2>

A mismatch between the skills of the jobless and the jobs that are available is referred to as structural unemployment. It differs from cyclical unemployment in that it results from factors other than the business cycle. 1 It happens when an underlying economic shift makes it challenging for some people to find work. It is more difficult to reverse than other forms of unemployment.

Learn more about types of structural unemployment at brainly.com/question/17272067?referrer=searchResults

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3 0
2 years ago
Which of the following best illustrates the unit of account function of money"?
Evgesh-ka [11]

Answer:

Explanation:

a you list prices for candy sold

7 0
2 years ago
Read 2 more answers
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