DO NOT ANSWER THIS QESTION

Tom transfers a building that originally cost $40,000 to Paul Corp. in exchange for 100% of the corporation's stock. the adjuste

Korolek [52]

Answer:

Gain recognized by Tom is $10000

So option (b) will be correct answer

Explanation :

We have given liability on bulding assumed by Paul Corp = $30,000

Tom's adjusted basis in the building = $20,000

Since the liability assumed by Paul Corp on the building is greater than Tom's adjusted basis, Tom must recognize gain equal to the difference between the liability on the building and his adjusted basis.

So gain recognized by Tom = $30,000 - $20,000 = $10,000

4 0

3 years ago

On March 13, a company writes off a customer's account of $3,500. On June 3, the customer unexpectedly pays the $3,500 balance.

Yuri [45]

Answer and Explanation:

The journal entries are shown below:

1. Allowance for doubtful Accounts Dr $3,500

To Accounts receivable $3,500

(Being the allowance for doubtful account is recorded)

2. Accounts receivable Dr $3,500

To Allowance for doubtful Accounts $3,500

(Being the written off amount is recorded)

3. Cash Dr $3,500

To Account receivable $3,500

(Being the cash collection is recorded)

Only these 3 entries are required

5 0

3 years ago

In 2019, Whispering Winds Corp. had net sales of $973,000 and cost of goods sold of $570,900. Operating expenses were $220,300,

tester [92]

Answer:

Whispering Winds Gross profit is $402,100

Explanation:

Multi step income statement differentiate the the operating revenue and expenses from non operating revenue and expenses. It shows the gross profit, operating profit and net profit separately.

Whispering Winds Corp.

Income statement for the year 2019

Net sales $973,000

Less: Cost of goods sold $570,900

Gross Profit $402,100

Less:Operating expenses $220,300

Operating Profit $181,800

Less: Interest expense $14,600

Profit before Tax $167,200

7 0

2 years ago

Kray Inc., which produces a single product, has provided the following data for its most recent month of operations:

Ilya [14]

Answer:

$76

Explanation:

The computation of Unit product cost under variable costing is shown below:-

Unit product cost under variable costing = Direct material + Direct labor + Variable manufacturing overhead

= $47 + $21 + $8

= $76

So, for calculating the Unit product cost under variable costing we simply added the direct material, direct labor and variable manufacturing overhead.

7 0

2 years ago

Walsh Company sells inventory to its subsidiary, Fisher Company, at a profit during 2012. One-third of the inventory is sold by

Ivanshal [37]

Answer:

A. Retained earnings

Explanation:

At the end of the period, the temporary accounts are closed, their balance is transfer to retained earnings, so the COGS and the sales revenue involved in the intra-entity transfer are contained in the retained earnings account

7 0

2 years ago