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kifflom [539]
3 years ago
8

Corporation M has $40,000 of current earnings and profits and $10,000 of accumulated earnings and profit. During the year Corpor

ation M distributes $60,000 to is only shareholder – N. Before the distribution, N has basis in their stock of $100,000. What amount of capital gain income will N recognize related to this distribution?
Business
1 answer:
zzz [600]3 years ago
6 0

Answer:

$40,000

Explanation:

Calculation to determine What amount of capital gain income will N recognize related to this distribution

Using this formula

N Capital gain income=N stock basis- M distribution

Let plug in the formula

N Capital gain income=$100,000-$60,000

N Capital gain income=$40,000

Therefore The amount of capital gain income that N will recognize related to this distribution is $40,000

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A couple thinking about retirement decide to put aside $2,100 each year in a savings plan that earns 7% interest. In 10 years th
Marina86 [1]

Answer:

310,588.5

Explanation:

As is not said we can assume the 2,100 each year to be paid at the end of the year, and the 7% to be used as a compunded anually rate. So let´s first think just about the 2,100, as they are regulary payments, they can be seen as an anuity inmediate, the formula is as follows:

s_{n}=p*\frac{(1+i)^{n}-1 }{i}

where sn is the future value of the regular payments, i is the interest rate and n is the number of payments and p is the amount of regular payment so in this particular case we have:

s_{n}=2,100*\frac{(1+0.07)^{30}-1 }{0.07}

s_{n}==198,367.65

So now let´s think on the gift of 29,000 as it is paid on 10 years, there will remain 20 years with an investment rate of 7% compounded anually. so there we have the classic formula of future value

FV=VP*(1+i)^{n}

where FV is the future value, PV is the present value, i is the interest rate per period, and n is the number of periods. Again in this particular case we have:

FV=29,000*(1+0.07)^{20}

FV=112,220.85

so the total amont will be:

total=198,367.65+112,220.85

total=310,588.5

8 0
4 years ago
Assume that you are a vending machine dealer. You plan to purchase a vending machine for $200,000. One year later, you are expec
stepladder [879]

Answer:

1) 22%

2) YES as the return in the investment is 12% while the average cost of capital in this case; is of 8% hence there is a gain above the minimum accepted return.

Explanation:

-200,000 + \frac{224,000}{1+ IRR}  = 0

IRR = 12%

weighted-average cost of capital:

DEBT      80,000 x 5%   =   4,000

EQUITY 120,000 x 10% =<u> 12,000</u>

VALUE  200,000             16,000

16,000 / 200,000 = 8%

4 0
3 years ago
Conner has located a research source that is sponsored by a pharmaceutical company. Based on the sponsorship,
gtnhenbr [62]

Answer:biased

Explanation:

5 0
3 years ago
Three factors that must be noted about each and every pulse are
babunello [35]
These three factors are Rate, rythm and volume of the pulse. The pulse can be taken in different regions of the body: .temporal area, <span>carotid area, brachial area, radial area, femoral area, popliteal area and dorsalis pedis. We need to remember that the normal pulse range in adults is </span><span>60-100 beats per minute. </span>
5 0
3 years ago
Vertical analysis can best be described as a technique for analyzing the percentage change in individual financial statement lin
Hoochie [10]

Answer:

False

Explanation:

Vertical analysis can be regarded as accounting tool which gives room for

proportional analysis of some documents. This document is usually

financial statements.In carrying out vertical analysis, all the item line that is on the financial statement is been recorded as percentage of another item. Instance of this is an income statement.

7 0
3 years ago
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