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Gre4nikov [31]
3 years ago
11

Juan transferred 100 percent of his stock in Rosa Company to Azul Corporation in a Type B stock-for-stock exchange. In exchange,

he received stock in Azul with a fair market value of $1,000,000. Juan's tax basis in the Rosa stock was $400,000. What amount of gain does Juan recognize in the exchange and what is his basis in the Azul stock he receives
Business
1 answer:
dybincka [34]3 years ago
6 0

Answer:

no gain is realized by juan. His basis in the Azul stock he receives is also the same $400,000 tax basis

Explanation:

According to section 368 of the internal revenue code of 1986, a type B stock-for-stock involves when the stock of a target company is traded in exchange for a portion of the stock of an acquiring company. When this occurs, the acquiring company takes over the shareholder of the target company and the target company is no longer part of its shareholders. However, the target company will now hold a minority shareholder of the acquiring company

From the question, Juan transferred 100 percent of his Rosa Company's stock to Azul Corporation in exchange for stock in Azul valued at $1,000,000 (except juan sells his Azul stock).

Therefore no gain is realized by juan. His basis in the Azul stock he receives is also the same $400,000 tax basis in the Rosa stock transferred to Azul Corporation.

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Roselawn Company reported net sales of $90,000 and net income of $18,000 for the previous year ended December 31. The company re
gregori [183]

Answer:

The company’s profit margin for the current year ended December 31 (rounded to the nearest decimal point) is 20%

Explanation:

Use the following formula to calculate the Profit Margin

Profit Margin = \frac{Net Income}{Net Sales} X 100

Where

Net Income = $20,000

Net Sales = $100,000

Placing values in the formula

Profit Margin = \frac{20000}{100000} X 100

Profit Margin = 0.2 x 100

Profit Margin = 20%

5 0
2 years ago
Assume that Roth’s accountants are expected to work a total of 8,000 direct labor hours in 2018. Roth’s estimated total indirect
xz_007 [3.2K]

Answer:

$12 and $180

Explanation:

The computation of the predetermined overhead rate is shown below:

As we know that

The predetermined overhead rate is

= Estimated total indirect cost  ÷ expected direct labor hours

= $96,000 ÷ 8,000

= $12

And, the indirect cost is

= Predetermined overhead rate × number of hours

= $12 × 15

= $180

We simply applied the above formula

8 0
3 years ago
Search... Unlock all answers JOIN FOR FREE jswagballerlife4060 01/08/2020 Business College answered LO 5.3Direct material costs
Tomtit [17]

Answer:

$130,000

Explanation:

Calculation to determine the value of the inventory transferred to the next department

First step is to calculate the Cost per unit

Using this formula

Cost per unit = Direct material costs + Direct labor costs + Overhead

Let plug in the formula

Cost per unit=$3+$5+(100%*$5)

Cost per unit = $3 + $5 + $5

Cost per unit = $13

Second step is to calculate the inventory transferred using this formula

Inventory transferred = Beginning inventory + Started Inventory - Ending inventory .

Let plug in the formula

Inventory transferred = 2,000 + 9,000 - 1,000

Inventory transferred = 10,000 units

Now let calculate the value of the inventory transferred

Using this formula

Value of inventory transferred = Inventory transferred × Cost per unit

Let plug in the formula

Value of inventory transferred = 10000 × $13

Value of inventory transferred = $130,000

Therefore the value of the inventory transferred to the next department is $130,000

8 0
2 years ago
Suppose Aiyanna's Pizzeria currently faces a linear demand curve and is charging a very high price per pizza and doing very litt
DedPeter [7]

Answer:

<em>Options Include:</em>

A. demand will become more price elastic.

B. price elasticity of demand will not change as price is lowered.

<em>C. demand will become less price elastic.  is Correct</em>

D. the elasticity of supply will increase.

Explanation:

<em>Typically as a broadly accurate guide, the product is called elastic if the quantity of a good demanded or purchased increases more than the change in price. </em>

(Price increases by + 5%, but demand decreases by -10%). When the shift in the purchased quantity is the same as the price change (say, 10 per cent/10 per cent= 1), the product is said to have price elasticity unit (or unitary).

Eventually, when the purchased quantity changes less than the price (say,-5 per cent demanded for a price change of+ 10 per cent), then the product is called inelastic.

7 0
3 years ago
Question:
soldier1979 [14.2K]

Answer: its environmental scientist

Explanation:

4 0
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