Answer:
Section 338 allows the corporation to purchase stock and retain the basis of assets. It also allows adjusting the basis for the assets. Under section 338 the, if the corporation sold its assets, the transactions related to sale will be subjected to double tax. Whereas, if the corporation cause liquidation for the target asset's and then undergo for a sale is subjected to single tax.
When bonds are sold to investors, the government benefits because it gets an injection of cash, while the purchaser benefits because in a few years it will have accrued interest.
Answer:
See below.
Explanation:
Since the expenses are related to the formation of the business, we first capitalize these expenses and record them in our balance sheet as,
Debit Intangible Assets (Formation) by $48,500
Credit Cash/Bank by $48,500
This records an asset for the year of operation.
We amortize or depreciate these type of capitalized costs over a defined period of time. Assuming that we write off the entire cost by the end of first year we will record amortization as,
Debit Amortization expense/Income statement by $48,500
Credit Intangible Assets (Formation) by $48,500
Hope that helps.
Answer:
D. $1 comma 000 billion increase
Explanation:
The reserve requirement ratio determines the total amount of checkable deposits a bank must keep.
In this case the reserve ratio it's 5%, which means that the total amount of deposits cannot exceed an amount equal to 20 times its reserves.
If the reserves increase by $50 billion then $50/0,05 = 1.000 billion increase.
