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kotegsom [21]
3 years ago
12

Inc. (WFI). After liquidating its remaining inventory and paying off its remaining liabilities, WFI had the following tax accoun

ting 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.(Negative amounts should be indicated by a minus sign.) What amount of gain or loss does Shauna recognize in the complete liquidation?
Business
1 answer:
Montano1993 [528]3 years ago
5 0

Answer:

On the transfer of the building,

Appreciation of building = FMV - Adjusted Basis

                                        = $50,000 - $10,000

                                        = $40,000

WFI has taxable transaction and gain recognition of $40,000.

On the transfer of the land,

Appreciation of land = FMV - Adjusted Basis

                                  = $150,000 - $90,000

                                  = $60,000

WFI has taxable transaction and gain recognition of $60,000.

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Alison's dress shop buys dresses from McGuire Manufacturing. Alison purchased dresses from McGuire on July 17 and received an in
kramer

Answer:

Allison should record the purchase at $5880

Explanation:

The net method for recording purchases implies that the purchases is recorded net of the envisaged cash discount on the transaction since the purchaser believes they would settle their account before the cash discount period expires.

Based on the above, the purchases would be recorded as shown below:

cost of purchase=original purchase value*(100%-discount rate)

original purchase price is $6,000

discount rate is 2%

cost of purchase=$6000*(100%-2%)

                           =$6000*98%

                            =$5880

4 0
3 years ago
Lydia really enjoys math and thinks that she would enjoy a job that involves analyzing data. Which job would be a good fit for h
Papessa [141]

the best choice would be to become a TAX AUDITOR.

8 0
3 years ago
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What are welfare payments or consumer studies?
klio [65]
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Hope this helps.
7 0
3 years ago
Which of the following describes the goal that should be pursued when setting transfer prices? Minimize opportunity costs. Maxim
nata0808 [166]

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Establish incentives for autonomous division managers to make decisions that are in the overall organization's best interests (i.e., goal congruence).

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3 years ago
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You are given the following information on Kaleb's Welding Supply: Profit margin 6.9 % Capital intensity ratio .78 Debt–equity r
Tatiana [17]

Answer:

0.1563946140 or 15.64%

Explanation:

The computation of the sustainable growth rate is shown below:

But before that we need to do the following calculations

As we know that

Profit margin = net income ÷ Sales

So,

0.069 = $86,000 ÷ Sales

Sales = $1,246,376.81159

Now

Capital intensity ratio = Total assets ÷ Sales

Total assets is

= $1,246,376.81159 × 0.78

= $972,173.91304

And,

Debt - Equity ratio = Debt ÷ Equity = 0.9

Now, if debt is 0.9, and equity is 1, Thereforetotal assets is 1.9 (0.9 + 1).

So,

Equity = Total assets x 1 ÷ 1.9

= $972,173.91304 ÷ 1.9

= $511,670.480547

And,  

Return on Equity (ROE) = Net income ÷ Equity

= $86,000 ÷ $511,670.480547

= 0.16807692307 or 16.807692307%

And,

Dividend payout ratio = Dividend ÷ net income

= $16,800 ÷ $86,000

= 0.1953488372

Now  

Retention ratio (b) = 1 - dividend payout

= 1 - 0.1953488372

= 0.8046511628

So,  

Sustainable growth rate (SGR) = (ROE x b) ÷ [ 1 - (ROE × b) ]

= (0.16807692307% × 0.8046511628) ÷ [ 1 - (0.16807692307% × 0.8046511628) ]

= 0.1563946140 or 15.64%

6 0
3 years ago
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