Answer:
- Punch Press - $12,502
- Lathe - $3,908.52
- Welder - $2,344.36
Explanation:
Cost will be allocated based on proportion of total Appraiser's estimate of fair value.
Total Appraisal Estimate = 16,000 + 5000 + 3,050
= $24,050
Total Purchase Price = Purchase price + Installation cost
=17,000 + 1,800
=$18,800
Punch Press
Punch Press proportion = 
= 66.5%
Punch Press Cost = 66.5% * 18,800
= $12,502
Lathe
Lathe proportion = 
= 20.79%
Punch Press Cost = 20.79% * 18,800
= $3,908.52
Welder
Welder proportion = 
= 12.47%
Punch Press Cost = 12.47% * 18,800
= $2,344.36
Note; There are multiple variants of this question so be sure to check the figures to ensure it is the right one.
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.
Answer:
maximum interest rate = 3%
so correct option is A) 3%
Explanation:
given data
investment = $6000
receive = $6180
borrow = $6000
to find out
maximum interest rate bank needs to offer on the loan
solution
we consider here maximum interest rate bank needs to offer is = r
so value of investment will be express here as
value of investment = amount to be borrowed × ( 1 + r ) ................1
put here value we get rate r
6180 = 6000 × ( 1 + r )
solve it we get
rate = 0.03
maximum interest rate = 3%
so correct option is A) 3%
Answer:
a. No, because Shelby made a mistake about the dog's value, not a mistake about a material fact.
Explanation:
Peggy made an offer to sell the dog for $800, they didn't discuss the dog's ancestry and Shelby wrongly assumed the dog was from champion lines and agreed to buy the dog for $800.
Based on further investigations, she discovered the dog was worth just $200.
She cannot rescind the contract because she wrongly assumed the dog's value not an error about à material fact. Peggy sold the dog at her own rates and Shelby bought the dog while wrongly assuming the value, so she cannot cancel the contract based on that.
Answer:
325 units per month
Explanation:
Cumulative demand for next four months:
= 200 + 400 + 250 + 350
= 1,200
Total production requirement
:
= Cumulative demand for next four months - Beginning inventory + Ending inventory
= 1,200 - 0 + 100
= 1,300
At level strategy, monthly production rate will be uniformly.
Therefore,
the monthly production rate will be as follows:
= 1,300 ÷ 4
= 325 units per month
