1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Andrej [43]
3 years ago
6

Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions Inc. (WFI). After liquidating its re

maining inventory and paying off its remaining liabilities, WFI had the following tax accounting balance sheet:
FMV Adjusted Basis Appreciation
Cash $200,000 $ 200,000
Building 50,000 10,000 40,000
Land 150,000 90,000 60,000
Total $400,000 $300,000 $ 100,000

Under the terms of the agreement, Shauna will receive the $200,000 cash in exchange for her 50 percent interest in WFI. Shauna's tax basis in her WFI stock is $50,000. Danielle will receive the building and land in exchange for her 50 percent interest in WFI. Danielle's tax basis in her WFI stock is $100,000. Assume for purposes of this problem that the cash available to distribute to the shareholders has been reduced by any tax paid by the corporation on gain recognized as a result of the liquidation. (Leave no answer blank. Enter zero if applicable. Negative amounts should be indicated by a minus sign.)

What amount of gain or loss does WFI recognize in the complete liquidation?
Business
1 answer:
kobusy [5.1K]3 years ago
8 0

Answer:

The gain on transaction of Building is $40,000 and of land is $60,000, so total gain is $100,000.

Explanation:

According to the scenario, the given data are as follows:

Cash Appreciation = $0

Building Appreciation = $40,000

Land Appreciation = $60,000

So, We can analyze the gain or loss for WFI after complete liquidation as follows:

So, on the transaction of the building, as building has an appreciation of $40,000, it will make a gain to WFI of $40,000.

Similarly, on the transaction of land, as land has an appreciation of $60,000, it will make a gain to WFI of $60,000.

So, total Gain = $40,000 + $60,000 = $100,000

You might be interested in
Who was the first missionary to arrive in Africa?​
podryga [215]
The london missionary sent david livingstone to south africa in 1840.
8 0
3 years ago
Read 2 more answers
This activity is focused on understanding what international business is, why and how it differs from domestic business, why it
Dafna11 [192]

Answer:

ang haba naman po

Explanation:

kaya niyo na iyan hehe

5 0
3 years ago
While on a hike with a tour group in the mountains, Derek gets mauled by a bear. No previous reports of bears in the area had be
wlad13 [49]

Answer: D. Derek assumed the risk of a bear attack by joining the tour group, so he cannot hold the tour company liable

Explanation:

Derek has to accept that by joining the tour group, he assumed some the risk of some elements of danger amongst them the bear attack.

Even though there had been no prior attack by bears in the mountain, a mountain hike still has some inherent danger in it and this includes bears. He cannot hold the tour company liable using this reason alone.

4 0
3 years ago
Catherine works for BluCorp, which has an employee handbook stating that employees will be terminated for good cause. Catherine'
adell [148]

Answer:

Contract

Explanation:

The reason is that the employee contract helps the employee to protect his rights and avoids the BluCorp to terminate the employee without any reason. So the employees act also safeguards the employee's rights and talks about the damages and the fines that will be imposed on the employer for terminating employees without any reasons.

3 0
3 years ago
3. How do the ultra rich use charitable giving to make sure they pay less taxes?
aliina [53]
Because when you donate to a charity it will not be taxed so you can put your money somewhere without it being taxed with it going somewhere good
3 0
3 years ago
Other questions:
  • Which of the following would not be considered an external user of accounting data for the Julian Company?
    9·1 answer
  • Taxes at the 1.___ level are known as municipal taxes. The two main components of this tax are 2.____ tax and sales tax.
    10·2 answers
  • A business may explore the advantages of​ licensing, franchising, management​ contracts, and turnkey projects. After businesses
    13·1 answer
  • Carter Company reported the following financial numbers for one of its divisions for the year; average total assets of $4,280,00
    10·1 answer
  • Good Time Company is a regional chain department store. It will remain in business for one more year. The probability of a boom
    6·1 answer
  • _____ is the method used to determine the number of units a firm must sell at a specific price to cover all costs.
    10·1 answer
  • A company's interest expense is $20,000. Its income before interest expense and income taxes is $140,000. Its net income is $58,
    10·1 answer
  • Managerial implications for the SDT theory include: Group of answer choices to motivate high performance for uninteresting jobs
    10·1 answer
  • HELP PLEASE!!!!!!!!!!!!!!!!!
    11·1 answer
  • Which of these describes what can happen with an adjustable-rate mortgage?
    11·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!