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fenix001 [56]
3 years ago
11

Billie transferred her 20 percent interest to Jean Company as part of a complete liquidation of the company. In the exchange, sh

e received land with a fair market value of $200,000. Billie's basis in the Jean stock was $100,000. The land had a basis to Jean Company of $400,000. What amount of loss does Jean recognize in the exchange and what is Billie's basis in the land she receives
Business
1 answer:
7nadin3 [17]3 years ago
3 0

Answer:

A) $200,000 loss recognized by Jean and a basis in the land of $200,000 to Billie

Explanation:

The computation is shown below:

For loss recognized, the amount would be

= Land basis - fair value of land

= $400,000 - $200,000

= $200,000

And, the basis in the land should be equal to the fair value of the land i.e $200,000

Hence, the correct option is A

By dividing the fair value from the land basis we can get the loss recognized

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3 years ago
Ajax Company purchased a five-year certificate of deposit for its building fund in the amount of $220,000. How much should the c
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Answer:

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Explanation:

Certificate of deposit of 220000 after 5 years @ 9% is calculated as below

As per the Present and future value tables of $1 at 9% presented

FVA of $ 1 after 5 years is 5.9847 and

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Therefore, The certificate of deposit be worth $338496.8 at the end of five years if interest is compounded at an annual rate of 9%

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<h3>What is a liability?</h3>

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Hence, it is correct to indicate that notes payable due in six months is reported as a short-term liability.

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Answer:

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