7. A corp seeks to acquire T corp. A transfers 500,000 shares of voting stock and 100,000 shares of non-voting stock to the shareholders of T corp in exchange for all their capital stock. T corp is thereafter a subsidiary of A corp. This transaction qualifies as a: a. "A" reorganization b. "B" (stock for stock) reorganization c. "C" reorganization d. Taxable transaction e. None of the above

7. A corp seeks to acquire T corp. A transfers 500,000 shares of voting stock and 100,000 shares of non-voting stock to the shareholders of T corp in exchange for all their capital stock. T corp is thereafter a subsidiary of A corp. This transaction qualifies as a: a. "A" reorganization b. "B" (stock for stock) reorganization c. "C" reorganization d. Taxable transaction e. None of the above

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 38P

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S1: A stock acquisition occurs when one corporation pays cash, issue stock, orissues debt for all or part of the voting stock and of another company; and the acquired company dissolves and ceases to exist as a separate legal entity. S2: In an asset acquisition, the books of the acquired company are closed out and its assets and liabilities are transferred to the books of the acquirer. A. Both statements are correct.B. Only S2 is correct.C. Only S1 is correct.D. Both statements are incorrect.
Pursuant to a complete liquidation, Carrot Corporation distributes to its shareholders real estate held as an investment (basis of $1,066,000, fair market value of $1,385,800). a. Determine the gain or loss recognized by Carrot on the distribution if no liability is involved. If no liability is involved, Carrot has a recognized of $ on the distribution. b. Determine the gain or loss recognized by Carrot on the distribution if the real estate is subject to a liability of $1,172,600. If the real estate is subject to a liability of $1,172,600, Carrot has a recognized of $ C. Determine the gain or loss recognized by Carrot on the distribution if the real estate is subject to a liability of $1,492,400. If the liability were $1,492,400, Carrot's recognized on the distribution would be
An entity acquired a 30% interest in another entity in Year I. In Year 2, it acquired another 50% equity interest in the same entity. Which of the following statements is valid?I. The entity's per-existing 30% equity interest should be remeasured at fair value at the acquisition date.Il. The entity's net assets should be remeasured at fair value at acquisition date. a. II only b. Neither I nor II c. Both I and II d. I only
"IFRS 10 Consolidated Financial Statements states that there are few ways to ascertain if the investor 'controls' and 'influences' its investees." Evaluate the statement above with reference to any applicable accounting standard and demonstrate the application of IFRS 10 Consolidated financial statements with the scenario provided below. Further, you must prepare a simplified consolidated statement of financial position as at 31st December 2020 а. to support your demonstration. Scenario: P acquires 100% of S's ordinary shares for RM1,500,000 on 31st December 2018. S's reserves (consists of only retained earnings) were RM 400,000 at the date of acquisition. The following presents the statement of financial position of both companies as at 31st December 2020. P S Notes RM RM As at 31st Dec 2020 000. *000 Non-current assets: Property, Plant and equipment Goodwill 2,000 1,000 Investment in S 1,500 Net current asset 300 200 3,800 1,200 Share capital 300 800 Retained earnings 3,500 400 3,800…
T holds two business assets, X (with a basis of 30 and a value of 120) and Y (with a basis of 70 and value of 50). T also has outstanding debt of $40 (held by C). T is wholly owned by A whose basis for his T stock is 50 (with a value of $130). Acquiring corporation P will acquire T’s assets in what is assumed to be a qualified section 368 reorganization. If T merges into P for $65 of P stock and $65 in cash, which cash and stock are distributed to A upon the surrender of A’s T shares; and P assumes T’s debt to C. Describe the consequences of the reorganization transaction to T, T’s shareholder A & P. a) Transferor corporation (T) b) Transferor Corporation’s shareholder (A) c) Acquiring Corporation (P)
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Pursuant to a complete liquidation, Carl Corporation distributes to its shareholders real estate held as an investment (basis of $650,000, fair market value of $775,000). a. Compute the gain or loss recognized by Carl Corporation on the distribution if no liability is involved. b. Compute the gain or loss recognized by Carl Corporation on the distribution if the real estate is subject to a liability of $700,000. c. Compute the gain or loss recognized by Carl Corporation on the distribution if the real estate is subject to a liability of $895,000.
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