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faust18 [17]
2 years ago
15

Sybil transfers property with a tax basis of $5,000 and a fair market value of $6,000 to a corporation in exchange for stock wit

h a fair market value of $3,000 and $2,000 cash in a transaction that qualifies as a section 351 transfer. The corporation assumed a liability of $1,000 on the property transferred. What is Sybil's tax basis in the stock received in the exchange?
A) $6,000.
B) $5,000.
C) $4,000.
D) $3,000.
Business
1 answer:
SCORPION-xisa [38]2 years ago
4 0

Answer:

D) $3,000

Explanation:

Calculation to calculate determine Sybil's tax basis in the stock received in the exchange

Tax basis $5,000

Add recognized gain $1,000

($6,000-$5,000)

Less boot received ($2,000)

Less liability ($1,000)

Sybil's tax basis $3,000

Therefore Sybil's tax basis in the stock received in the exchange will be $3,000

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Answer: The system of tax began in America in the year 1861, this was during the civil war, where the Congress passed an Act that included a tax on personal incomes inorder to meet up war expenses.

Explanation:

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3 years ago
Suppose that in 1984 the total output in a single-good economy was 7,000 buckets of chicken. Also assume that in 1984 each bucke
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Answer:

A) What is the GDP price index for 1984, using 2005 as the base year?

  • the GDP price index using 2005 as base year = [($15 / $20) x 100] = 75

B) By what percentage did the price level, as measured by this index, rise between 1984 and 2005? ...percent.

  • the price level increased by: [(100 - 75) / 75] x 100 = 33.33%

C) What were the amounts of real GDP in 1984 and 2005?

  • In 1984, real GDP = $20 x 7,000 buckets =  $140,000 or we can also use another method = ($15 x 7,000) / 0.75 = $105,000 / 0.75 = $140,000. The answer using both methods should be the same.
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Conduct a horizontal analysis by calculating the year-over-year changes in each line item, expressed in dollars and in percentag
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Answer:

Computer Tycoon, Inc.

1. Horizontal Analysis, calculating the year-over-year changes in each line:

Computer Tycoon, Inc. Income Statements  For the Year Ended December 31    

                                                      2016         2015            Dollars      %

Sales Revenue                             $108,000  $132,000  -$24,000  -18.2%

Cost of Goods Sold                         64,000      74,700   -$10,700  -14.3%

Gross Profit                                      44,000     57,300   -$13,300  -23.2%

Selling, General, & Administrative

                         Expenses               36,800     38,600   -$1,800      -4.7%

Interest Expense                                  580           515     $65         +12.6%

Income before Income Tax Exp.      6,620       18,185  -$11,565     -63.6%

Income Tax Expense                         1,500       5,800   -$4,300     -74.1%

Net Income                                      $5,120    $12,385   -$7,265    -58.7%

2-A. Vertical analysis by expressing each line as a percentage of total revenues:

Computer Tycoon, Inc. Income Statements  For the Year Ended December 31    

                                                      2016            %             2015             %

Sales Revenue                             $108,000     100        $132,000    100

Cost of Goods Sold                         64,000      59             74,700     56.6

Gross Profit                                      44,000       41             57,300     43.4

Selling, General, & Administrative

                         Expenses               36,800       34           38,600       29.2

Interest Expense                                  580       0.5                515      0.4

Income before Income Tax Exp.      6,620        6              18,185      13.8

Income Tax Expense                         1,500       1.4             5,800       4.4

Net Income                                      $5,120       4.7         $12,385      9.4

2-B No. It made less profit per dollar of sales in 2016 compared to 2015.

Explanation:

a) Horizontal analysis is the analysis of financial statements to show changes in the amounts of corresponding financial statement items over a period of time.  It is used to evaluate the trend situations, using financial statements for two or more periods.

b) Vertical analysis is another technique for analyzing financial statements with each line item being listed as a percentage of a base figure within the statement.  For income statement, the base figure is usually the Sales Revenue, while for balance sheet, the base figure is the total assets.

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3 years ago
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