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natima [27]
3 years ago
5

Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions Inc. (WFI). After liquidating its re

maining inventory and paying off its remaining liabilities, WFI had the following tax accounting balance sheet:
FMV Adjusted Basis Appreciation
Cash $ 200,000 $ 200,000
Building 50,000 10,000 40,000
Land 150,000 90,000 60,000
Total $ 400,000 $ 300,000 $ 100,000

Under the terms of the agreement, Shauna will receive the $200,000 cash in exchange for her 50 percent interest in WFI. Shauna's tax basis in her WFI stock is $50,000. Danielle will receive the building and land in exchange for her 50 percent interest in WFI. Danielle's tax basis in her WFI stock is $100,000. Assume for purposes of this problem that the cash available to distribute to the shareholders has been reduced by any tax paid by the corporation on gain recognized as a result of the liquidation. (Leave no answer blank. Enter zero if applicable. Negative amounts should be indicated by a minus sign.)

10.

value:
1.00 points

Required information

a. What amount of gain or loss does WFI recognize in the complete liquidation?



References

eBook & Resources

ProblemDifficulty: 2 MediumLearning Objective: 19-05 Calculate the tax consequences that apply to the parties to a complete liquidation of a corporation.

Check my work

11.

value:
1.00 points

Required information

b. What amount of gain or loss does Shauna recognize in the complete liquidation?



References

eBook & Resources

ProblemDifficulty: 2 MediumLearning Objective: 19-05 Calculate the tax consequences that apply to the parties to a complete liquidation of a corporation.

Check my work

12.

value:
1.00 points

Required information

c. What amount of gain or loss does Danielle recognize in the complete liquidation?



References

eBook & Resources

ProblemDifficulty: 2 MediumLearning Objective: 19-05 Calculate the tax consequences that apply to the parties to a complete liquidation of a corporation.

Check my work

13.

value:
1.00 points

Required information

d. What is Danielle’s tax basis in the building and land after the complete liquidation?
Business
1 answer:
yan [13]3 years ago
4 0

Answer:

1. Based on the information given WFI transaction is a taxable transaction which include a recognizes gain of the amount of $40,000 on the transfer of the building as.well as gain of the amount of $60,000 on the transfer of the land.

2. Shauna will recognizes gain of the amountc of $150,000 on the transfer of her stock made to WFI calculated as ($200,000 - $50,000) .

Explanation:

1. Based on the information given WFI transaction is a taxable transaction which include a recognizes gain of the amount of $40,000 on the transfer of the building as.well as gain of the amount of $60,000 on the transfer of the land.

2. Shauna will recognizes gain of the amount of $150,000 on the transfer of her stock made to WFI calculated as ($200,000 - $50,000) .

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Explanation:

The Program Evaluation and Review Technique (PERT) is used to know the schedule tasks and also know the critical path variation. It is useful to know the length of time that'll be needed for the completion of every task and how it relates to others in order to know the entire time needed to complete the particular project.

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The Smelting Department of Kiner Company has the following production data for November. Production: Beginning work in process 3
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Answer:

(A) 18,400 units

(B) 12,940 units

Explanation:

The computation of the equivalent units of production for

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                   = 18,400 units

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Which of these factors would be considered when making a location decision at the region/community level?
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Answer:

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Assuming that the last time Nicole billed her customers was November, she was able to collect $11,760 before the year ended. I will also assume that the remaining $240 are uncollectible.

If Nicole postpones billing her customers during December, her taxable income as a cash basis taxpayer will decrease by $12,000 x 70% = $8,400

she will be able to save $8,400 x 2% = $168 in current taxes, but she will have to pay them next year anyways.

b) The time value of money should affect Nicole's calculations because she is saving the interests that could be earned by $168 in 1 year. We are not given any specific interest rate but we could use 6% as an example. Nicole will gain $168 x 6% = $10.08

But she will also lose potential interests earned on the $8,400 that she billed later. Using the same interest rate, 6%, she will lose $8,400 x 6% x 1/12 (only 1 month) = $42.

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As you can see, Nicole is losing money. The higher the interest rate, the more money she will lose.

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4 0
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