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Rudik [331]
3 years ago
15

Chrissie and Mirinda want to form a corporation. Chrissie contributes property worth $750,000 and a basis of $500,000 in exchang

e for stock worth $750,000 and Mirinda contributes services in exchange for stock worth $250,000.
Does this qualify as a good Section 351 transaction?

What gain does Chrissie Recognize?

What gain does Mirinda recognize?
Business
1 answer:
lora16 [44]3 years ago
6 0

Answer:

a. Does this qualify as a good Section 351 transaction?

Answer: No. This is because service is not a qualified property contribution under the section 321. Moreover, fair value of stock received by Chrissie is just 75% of 100%.

b. What gain does Chrissie Recognize?

Answer: The Gain Chrissie recognizes = FMV of stock received - Adjusted basis of transferred property = $750,000 - $500,000 = $250,000.

c. What gain does Mirinda recognize?

Answer: The Gain Mirinda recognizes is $0 or Mirinda will recognizes compensation worth which will be taxed as an ordinary Income ($250,000).

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How do organizations calculate various costs, and what do these calculations mean to business?
QveST [7]

Answer:

See the explanation section

Explanation:

Organizations calculate various costs with the help of the weighted average cost of capital. It is a significant cost measurement system through which organizations can calculate the cost of debt after tax, cost of new equities, cost of existing equities, and cost of preferred shares. WACC can be a benchmark for the organization. A firm needs to know those costs because it can make sure that whether those projects are running smoothly to continue or running worse to reject.

Another significant cost measurement method is the net present value. With the help of NPV, a business can make sure about a project to accept it or reject it.

8 0
2 years ago
A shop that makes candles offers a blueberry scented candle which has daily demand of 10 boxes. Blueberry candles can be produce
Lostsunrise [7]

Answer:

E. 115 boxes.

Explanation:

d: 10 boxes/day

p: 36 boxes/day

n: 365 days

s: $60

H: $24 box/year

D: d*n

D= 10*365= 3650 boxes/year

EPQ = \sqrt{2DS/H} *\sqrt{p/p-d}

EPQ=\sqrt{2*365*60/24} *\sqrt{36/36-10}  

EPQ= 158.96 = 159 units

I=Q/P * (p-d)

I=159/36 * (36-10)

I=114.83

115 boxes aproximately

7 0
3 years ago
Jasmine Company sold $1,000,000 of 6%, 10-year bonds at 97 on January 1, 2020. The bonds were dated January 1, 2020 and pay inte
Snowcat [4.5K]

Answer:

$62,445

Explanation:

Discount on bond payable = ($1,000,000 / 100) x (100-97) = 30,000

Number of period = 2 x 10 = 20

Discount amortized every period = 30,000 / 20 = $1,500

Interest Expense on June 30 = (1,000,000 x 6%/2) + 1500 = $31,500

Principal Payment = $50,000 - $31,500 = $18,500

Outstanding bonds = 1,000,000 - $18,500 = $981,500

Interest Expense on December 31 = ($981,500 x 6%/2) + 1500 = $30,945

Total Interest Expense in 2020 = $31,500 + $30,945 = $62,445

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3 years ago
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Answer:

d) Contractual non-compliance provisions are broader in scope.

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Both common law and civil law were originated in western Europe. Common law comes from medieval England while civil law comes from ancient Roman Empire. Common law is more flexible than civil law, so that allows different interpretations of the law. Since civil law is more rigid, contractual non-compliance provisions must include all possible contingencies and their outcomes.

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2 years ago
Web application firewalls, security information and event management systems, access controls, network security monitoring, and
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