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stiv31 [10]
2 years ago
14

Comet Company is owned equally by Pat and his sister Pam, each of whom hold 100 shares in the company. Comet redeems 50 of Pam's

shares on December 31, 20X3, for $1,000 per share in a transaction that Pam treats as an exchange for tax purposes. Comet has total E&P of $160,000 on December 31, 20X3. What are the tax consequences to Comet because of the stock redemption?
A. No reduction in E&P because of the exchange.
B. A reduction of $50,000 in E&P because of the exchange.
C. A reduction of $40,000 in E&P because of the exchange.
D. A reduction of $80,000 in E&P because of the exchange.
Business
1 answer:
saw5 [17]2 years ago
8 0

Answer:

Correct option is C

Explanation:

Total E&P = $ 160000

Total voting Right Sold = 50/ (100+100) = 25%

Reduction of E& P due to exchange = Total E&P*Total voting Right Sold

Reduction of E& P due to exchange = 160000*25%

Reduction of E& P due to exchange = 40000

Reduction of E& P Lower of Total E&P*Total voting Right Sold or Amount realised

Reduction of E& P Lower of 40000 or (50*1000)

Reduction of E& P Lower of 40000 or 50000

Answer

C. A reduction of $40,000 in E&P because of the exchange.

 

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Explanation:

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3 years ago
Spin Cycle Architecture uses three activity pools to apply overhead to its projects. Each activity has a cost driver used to all
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Answer:

a. predetermined overhead rate for each activity

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b. Classification

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Product level activities :

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Explanation:

This question requires application of Activity Based Costing (ABC) method of allocating overheads.

For each overhead a rate is determined as follows :

<em>initial concept formation </em>

Predetermined overhead rate = Overhead Cost / Number of Project Changes

                                                  = $52,960/ 16

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<em>design </em>

Predetermined overhead rate = Overhead Cost / Square feet

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<em>construction oversight </em>

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5 0
2 years ago
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3 years ago
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8 0
3 years ago
According to Victor Vroom, which of the following is not considered a factor that influences motivation?
Gre4nikov [31]

Answer:

A, independence

Explanation:

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It can also be said to be the a force that drives the wants, needs, etc of an individual. Motivation have various influencing factors as well as several modes.

Factors that influences motivation include; valence, instrumentality, expectancy, etc.

Modes of motivation include; intrinsic, extrinsic, introjected and identified motivation.

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Cheers.

7 0
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