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julsineya [31]
3 years ago
8

Dove and Eagle formed a business entity in which they are equal owners. Dove contributed cash of $100,000, and Eagle contributed

land with a basis of $40,000 and fair market value of $100,000. For its first year of operations, the entity had taxable income of $60,000 and made no distributions. At year end it had outstanding recourse liabilities to third parties of $10,000. Eagle had a basis of $70,000 in the entity at the end of the first year of operations. What type of entity was formed
Business
1 answer:
nlexa [21]3 years ago
4 0

Answer:

S corporation

Explanation:

In the given case, The eagle basis at the closing of the year is 70,000 i.e. $40,000 + $30,000 (50% of $60,000)

In the case when the entity was a general partnership so 50% of $10,000 i.e. $5,000 would be added to the basis of Eagle

So here the type of entity that was formed is S corporation

The same is relevant

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Answer:

A) Differential analysis is shown below

B) its product should be continue.

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As per the data given in the question,

a)

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Revenue         $1,150,000                                $0                      -$1,150,000

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Fixed costs     -$125,000                                  $0                        $275,000

Profit(Loss)      -$100,000                                -$125,000            -$25,000

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Answer: 1. 18 times

2. Park is in better position

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1. Times interest earned is a financial ratio that measures interest coverage. It's essentially to check if a company can pay it's debt payments and is calculated by either EBIT or EBITDA divided by the total interest expense. The higher the better and anything above 2.5 times is usually considered.

Calculating would therefore be,

= $6,120,000 /$340,000

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