Calculate price per gram when 3.5 grams for $100.00

Greiner, Inc., a calendar year S Corporation, holds no AEP. During the year, Chad, an individual Greiner shareholder, receives a

Likurg_2 [28]

Answer:

The long term capital gain= $30000-$25000

The long term capital gain= $5000

The basis in stock will be zero after the distribution.

Explanation:

Step 1 of 3

Tax treatment of amount distributed to shareholders:

The amount received as distribution to a shareholder under S Corporation is equal to the cash and fair market value of property distributed. The distribution is considered as tax-free to the limit that it does not exceed shareholder’s basis in the company’s stock. Any amount received in excess of basis will be treated as capital gain.

Step 2 of 3

However, taxation depends whether S Corporation has ever been a C Company or it posses’ accumulated earnings and profits. If it was never a C Corporation or doesn’t holds AEP then distribution equals to basis of share in S Corporation is a tax free gain for shareholder. Gain over and above basis is taxed as capital gains.

Step 3 of 3

In the given problem, C is a shareholder in S Corporation. He receives $30,000 as cash distribution. His basis in stock is $25,000. The distribution up to basis of stock is tax free distribution and above that is charged to capital gains. It is as follows-

Thus, capital gain of is taxable in hands of C. His basis in S Corporation will reduced to zero as entire distribution is over and above basis of his stock.

3 0

3 years ago

A professional basketball players' union negotiates a contract that dramatically increases all players' salaries. How would this

Misha Larkins [42]

Answer:

B) It would increase the opportunity cost of becoming a broadcaster.

Explanation:

Opportunity costs are defined as the cost of choosing one alternative activity or investment over another.

The basketball player has two options, he can continue to play for an NBA team with a much better salary, or he can decide to become a broadcaster. If the player decides to quit basketball, then he will lose more money due to pay raise. That amount of money that he will lose if he decides to become a broadcaster is the opportunity cost of becoming a broadcaster. Since the pay increase raised the player's salary, the opportunity cost of becoming a broadcaster also increases.

4 0

3 years ago

On October 29, Lobo Co. began operations by purchasing razors for resale. The razors have a 90-day warranty. When a razor is ret

saul85 [17]

Answer: Please refer to Explanation

Explanation:

It is stated that the company expects warranty costs to equal 8% of dollar sales and that the cost of 1 razor is $15 to make.

Nov 11

DR Cash $4,900

CR Sales $4,900

(To record Sale of Razors)

Nov 11

DR Cost of goods sold (70*15) $1,050

CR Merchandise inventory $1,050

(To record Cost of Goods Sold)

Nov 30

DR Warranty expense (4,900 * 8%) $392

CR Estimated warranty liability $392

(To record Warranty Expense)

Dec 9

DR Estimated warranty liability (14 *$15) $210

CR Merchandise inventory $210

(To Record Warranty Liability)

Dec 16

DR Cash $14,700

CR Sales $14,700

(To record sale of Razors)

Dec 16

DR Cost of goods sold (210 * 15) $3,150

CR Merchandise inventory $3,150

( To record Cost of Goods sold)

Dec 29

DR Estimated warranty liability (28*15) $420

Merchandise inventory $420

( To record Warranty Liability)

Dec 31

DR Warranty expense (14,700*8%) $1,176

CR Estimated warranty liability $1,176

(To record Warranty Expense)

Year 2

Jan 5

DR Cash $9,800

CR Sales $9,800

(To record sale of Razors)

Jan 5

DR Cost of goods sold (140 *15) $2,100

CR Merchandise inventory $2,100

(To record Cost of Goods sold)

Jan 17

DR Estimated warranty liability (33*15) $495

CR Merchandise inventory $495

(To record Warranty Liability)

Jan 31

DR Warranty expense (9,800 * 8%) $784

CR Estimated warranty liability $784

(To record Warranty Expense)

3 0

3 years ago

When a company discontinues an operation and disposes of the discontinued operation (component), the transaction should be inclu

Ne4ueva [31]

Answer:

1. an amount after continuing operations.

Explanation:

In preparing the income statement the transactions resulting into gain or loss from the discontinued operations are always reported in income statement.

For this there is special heading that is

Amount after continuing operations

This basically reflects the gain or loss from the sale of such segment.

This provides for reporting all the transactions as part of business but in an highlighted manner.

4 0

3 years ago

You are Chair of the Federal Reserve Board. In your meeting with the Federal Open Market Committee, the committee un-animously v

ivolga24 [154]

You reply that "OMOs are the purchase and sale of government securities. To increase the money supply we will buy government securities which increases the amount of reserves in the banking system and fuels deposit expansion".

<u>Option: A</u>

<u>Explanation:</u>

The action of central bank to offer or take liquidity from or into a bank or a collection of banks in its exchange rate currencies is understood as an open market operation or OMO. The central bank is the only origin of such policy which may either purchase or sell the bonds of government on the open market or in what is now often the acceptable option, engage into a repo or protected lending agreement with a commercial bank: the central bank lend the monetary as a reserve over a given period of time and concurrently selects the qualified asset as security.

Here the Chair of the Federal Reserve Board explained OMO for the purpose of their use in the scenario of increasing money supply, by purchasing or selling the bonds or securities of public authorities to eligible bodies for the increment of assets in banking sector to drive the expansion of deposits.

8 0

3 years ago