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ki77a [65]
3 years ago
10

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, year 1, for $1,000 per share in a transaction that Pam treats as an exchange for tax purposes. Comet has total E&P of $250,000 on December 31, year 1. What are the tax consequences to Comet as a result of the stock redemption? A) No reduction in E&P as a result of the exchange. B) A reduction of $62,500 in E&P as a result of the exchange. C) A reduction of $50,000 in E&P as a result of the exchange. D) A reduction of $125,000 in E&P as a result of the exchange.
Business
1 answer:
lesantik [10]3 years ago
7 0

Answer:

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

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

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Furkat [3]

Answer: Option A  

                             

Explanation: One of the major advantage of using newspaper is that an individual can reach to the prospects on such demo-graphical areas where other mediums might not work effectively and efficiently.

If an entity wants to advertise its product to smaller audiences at living in difficult places then it should go for newspaper. Also newspaper is the most common medium as one might not watch tv or listen radio daily but most of the individuals read newspaper everyday at morning.

Hence the correct option is A .

4 0
3 years ago
A petty cash fund was established with a $350 balance. It currently has cash of $41 and petty cash tickets totaling $309. Which
Vesna [10]

Answer:

C. A credit to Petty Cash for $309

Explanation:

Based on the information given we were told that the PETTY CASH tickets total the amount of $309 which therefore means that the appropriate entry included in the entry to REPLENISH THE FUND will be :

A credit to Petty Cash for $309

(Replenish fund)

7 0
3 years ago
Koch traded Machine 1 for Machine 2 when the fair market value of both machines was $49,500. Koch originally purchased Machine 1
Shalnov [3]

Answer:

$40,500.

Explanation:

Calculation for Koch's adjusted basis in machine 2 after the exchange

Based on the information given we were told that Machine 1's had adjusted basis of the amount of $40,500 at the time of the exchange which means that Koch's adjusted basis in machine 2 after the exchange will the amount of $40,500 which is Machine 1's adjusted basis .

Therefore Koch's adjusted basis in machine 2 after the exchange will be $40,500

6 0
3 years ago
In this equation what should be the coefficients of the reactant and products I2+O2->i4O9
katrin2010 [14]
The correct answer is C.

For the equations to be balanced, the coefficients must make the number of atoms of the reactants and products the same across the equation. The other answer options leave the reactants having too many atoms and the product lacking. So the only properly balanced option is answer choice C.

So the completed balanced equation is:
4I2 + 9O2 -> 2I4O9

I hope this helps! :)
4 0
3 years ago
If you are a DECA member, tell me why, and what you think about it.
Ne4ueva [31]

Answer:

i am

Explanation:

i like deca but i dont at the same time it tends to get annoying

3 0
3 years ago
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