1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
xz_007 [3.2K]
2 years ago
14

Good, a C corporation, sells an automobile to its sole shareholder for $4,500. Good's adjusted basis in the automobile is $12,00

0, and the fair market value is $5,000. What is the amount of loss that is recognized by Good
Business
1 answer:
Fiesta28 [93]2 years ago
3 0

Answer:

$0

Explanation:

The computation of the amount of loss is shown below:

Generally taxpayers does not subtracted the losses on sales of property that can be with the related parties

And, in the case when a corporation and the shareholder who owns more than 50% of that one corporation so it to be considered as the relevant parties

Therefore the amount is zero

You might be interested in
Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $50,000 or $150,000, with equal
Ann [662]

Answer:

Kindly check explanation

Explanation:

Given the following :

Risk free return (risk less investment) = 5%

Cashflow derived from portfolio = $50,000 or $150,000 each at a probability of 0.5

(a) If you require a risk premium of 10%, how much will you be willing to pay for the portfolio?

Risk premium = 10%

Required return on portfolio = risk premium + risk free return = (10% + 5%) = 15%

Expected value of cashflow:

(0.5 × $50,000) + (0.5 × $150,000)

$25,000 + $75,000 = $100,000

Value of portfolio = Amount paid(a) × (1 + required return)

100,000 = a( 1 + 0.15)

100,000 = 1.15a

a = (100,000 / 1.15)

a = 86956.521

a = $86,956.5

B) If amount paid for portfolio = $86,956.5

Expected rate of return :

(Expected value - amount paid) / amount paid

= ($100,000 - $86,956.5) / $100,000

= $13043.5 / $100,000

= 0.130435 = 13.04%

C.) Now suppose you require a risk premium of 15%. What is the price you will be willing to pay now?

Risk premium = 15%

Required return on portfolio = risk premium + risk free return = (15% + 5%) = 20%

Value of portfolio = Amount paid(a) × (1 + required return)

100,000 = a( 1 + 0.20)

100,000 = 1.20a

a = (100,000 / 1.20)

a = 83333.333

a = $83,333.3

D.)

At a required risk premium of 10%, portfolio will sell at $86,956.5

At a required risk premium of 15%, portfolio will sell at $83,333.3

Hence, the price at which a portfolio will sell decreases as risk premium increases.

7 0
3 years ago
A company delivers packages by truck and would like to minimize the length of the route that each driver must travel in order to
Dovator [93]

Answer:

Algorithm II uses a heuristic approach to provide an approximate solution in reasonable time.

Explanation:

6 0
2 years ago
Given the following information about Elkridge Sporting Goods, Inc., construct a balance sheet for June 30, 2013. On that date t
OLga [1]

Answer:

<em>Retained Earnings = 109,909</em>

Explanation:

\left[\begin{array}{cccc}cash&25,135&AP&67,855\\AR&43,758&NP&36,454\\inventory&172,500&Long-term&222,300\\fixed \:assets&332,300&Common\: Stock&150,000\\other \: assets&13,125&RE&110,209\\Total Assets&586,818&Total L+E&586,818\\\end{array}\right]

<u>First </u>

We add all the assets together. 586,818

<u>Then</u>

we add the lliabilities and common stock. 476,909

<u>Finally</u>

We use the accounting equation to solve for RE

Assets = Liab + Equity

586,818 = sum of liab and equity accounts

we know that all the accounts, except RE add to 476,909

586,818 = 476,909 + RE

586,818 - 476,909 = RE

RE = 109,909

5 0
3 years ago
In preparing Marjorie Company's statement of cash flows for the most recent year, the following information is available:
Damm [24]

Answer: The answer is e. $264,000 of net cash provided.

Explanation:

Marjorie Company

Statement of cash flows

Purchase of equipment                                    ($260,000)

Proceeds from sale of equipment                        87,000

Purchase of land                                                   (91,000)

Net cash flows from investing activities        $264,000

5 0
3 years ago
At the current year-end, Ruiz Company found that its overhead was underapplied by $2,500, and this amount was not considered mat
Reptile [31]

Answer:

Close the $2,500 to Cost of Goods Sold.

Explanation:

Underapplied Overhead bis the portion of actual factory overhead cost that was not allocated to units of production. Since overhead cost do not contribute directly to production they need to be allocated to units produced. For example rent paid is $300 and goods produced was 50. The allocated amount per unit produced will be 300/50= $6 per unit.

When overhead is underapplied there is descrepancy between the standard amount allocated and the actual overhead cost. In this case a sum of $2,500.

To remedy this we need to close the $2,500 to Cost of Goods Sold.

7 0
3 years ago
Other questions:
  • Which of the following statements can be used to explain the growth of international business? a. Many countries in Europe and A
    9·1 answer
  • One reason forever green lawn service uses __________ segmentation is because finding new customers is costly.
    5·1 answer
  • Schreiber Industries estimates bad debts at 2% of sales. Schreiber began the year with $270,000 of accounts receivable and $38,6
    14·1 answer
  • Which of the following is true about the self-employed health insurance deduction? a. Medical insurance is allowed as a deductio
    6·1 answer
  • Watermelon, Inc. provides the following data: 20X9 20X8 Cash $41,000 $25,000 Accounts Receivable, Net 102,000 62,000 Merchandise
    11·1 answer
  • Journalize the entries to record the following selected bond investment transactions for Hall Trust (refer to the Chart of Accou
    9·1 answer
  • 5. A nation's frictional unemployment rate is 1%. Its cyclical rate of unemployment is 9.7%, and its structural
    7·1 answer
  • Which of the following is a function of the Federal Reserve System Board of Governors?
    7·1 answer
  • Inventories held for sale in the normal course of business are classified in the balance sheet as?
    9·1 answer
  • ASAP Please help and thank you!
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!