Omega Corp. has entered into a transaction with Lively Inc. Omega Corp will give its equipment to Lively Inc. in exchange for Li
vely's equipment. Omega Corp will also pay Lively Inc. $30,000 cash. Omega Corp's equipment originally cost $250,000 when it was purchased 2 years ago and currently has $80,000 of accumulated depreciation and an estimated fair value of $230,000. Lively's equipment has a cost of $212,000 and accumulated depreciation of $35,000. The fair value of Lively Inc's equipment is determined to be $260,000. Required:
A. Prepare the journal entry for Omega Corp assuming the exchange has commercial substance.
B. Prepare the journal entry for Omega Corp assuming the exchange lacks commercial substance.
The Securities Act of 1933 requires that investors receive financial and other significant information regarding any and all securities being sold publicly and prohibits deceit, misrepresentations, and other fraud in the sale of securities. Therefore, since there was material misstatement or omission in the financial statements, the only chance the CPA has is if they rebut the allegations. Meaning that they provide actual evidence, such as physical statements or witnesses that contradict or nullify the evidence that is being presented against them regarding the material misstatement or omission
The correct answer to the following question is option B) decrease.
Explanation:
Regressive tax is that of tax which is imposed in such manner that when the income level in the economy increases , the average tax rate would decrease. This type of tax has heavy burden on the low income people as it takes high proportion of their income. So it can be said here that there is an inverse relationship between tax payer's ability to pay ( which can be measured in income , assets or consumption) and the tax rates imposed.
