Required information[The following information applies to the questions displayed below.]Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in exchange for consultingservices he provided. If Cirque Capital had paid an outsider to provide the advice, it would have deducted the payment ascompensation expense. Cirque Capital's balance sheet on the day Dave received his capital interest appears below:Fair MarketValueBasisAssets:Cash$ 160,000Investments$ 160,000290,000100,000314,000200,000LandTotals$ 550,000$ 674,000Liabilities and capital:Nonrecourse liabilities$ 180,000$ 180,000Lance*247,000185,000185,000247,000Robert*Totals$ 550,000$ 674,000*Assume that Lance's basis and Robert's basis in their LLC interests equal their tax basis capital accounts plus theirrespective shares of nonrecourse liabilities. (Leave no answer blank. Enter zero if applicable.)a. Compute and characterize any gain or loss Dave may have to recognize as a result of his admission to Cirque Capital.> Answer is complete but not entirely correct.Gain or loss recognized51,400 as Ordinary income

a. Compute and characterize any gain or loss Dave may have to recognize as a result of his admission to Cirque Capital. Answer is complete but not entirely correct. Gain or loss recognized $ 51,400 as Ordinary income

a. Compute and characterize any gain or loss Dave may have to recognize as a result of his admission to Cirque Capital. Answer is complete but not entirely correct. Gain or loss recognized $ 51,400 as Ordinary income

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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! Required information [The following information applies to the questions displayed below.] Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in exchange for consulting services he provided. If Cirque Capital had paid an outsider to provide the advice, it would have deducted the payment as compensation expense. Cirque Capital's balance sheet on the day Dave received his capital interest appears below: Assets: Cash Investments Land cana Totals Liabilities and capital: Nonrecourse liabilities Tatsuki* Robert* Totals Tax basis $ Dave 0 Basis *Assume that Tatsuki's basis and Robert's basis in their LLC interests equal their tax basis capital accounts plus their respective shares of nonrecourse liabilities. Note: Leave no answer blank. Enter zero if applicable. Tatsuki $ 150,000 200,000 150,000 $ 500,000 b. Compute each member's tax basis in his LLC interest immediately after Dave's receipt of his interest. Robert $ 100,000 200,000 200,000 $…
Required information [The following information applies to the questions displayed below.] Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in exchange for consulting services he provided. If Cirque Capital had paid an outsider to provide the advice, it would have deducted the payment as compensation expense. Cirque Capital's balance sheet on the day Dave received his capital interest appears below: Assets: Cash Investments. Land Totals Liabilities and capital: Nonrecourse liabilities Lance* Robert* Totals Tax basis Dave Basis Lance $ 220,000 300,000 100,000 $ 620,000 Robert $ 200,000 210,000 210,000 $ 620,000 *Assume that Lance's basis and Robert's basis in their LLC interests equal their tax basis capital accounts plus their respective shares of nonrecourse liabilities. (Leave no answer blank. Enter zero if applicable.) Fair Market Value b. Compute each member's tax basis in his LLC interest immediately after Dave's receipt of his…
[The following information applies to the questions displayed below.] Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in exchange for consulting services he provided. If Cirque Capital had paid an outsider to provide the advice, it would have deducted the payment as compensation expense. Cirque Capital's balance sheet on the day Dave received his capital interest appears below: Fair Market Value Basis Assets: Cash Investments $ 220,000 300,000 100,000 $ 220,000 330,000 260,000 Land Barca Totals $ 620,000 $ 810,000 Liabilities and capital: DLAD Nonrecourse liabilities $ 200,000 $ 200,000 Lance* 210,000 210,000 305,000 305,000 Robert* Totals $ 620,000 $ 810,000 *Assume that Lance's basis and Robert's basis in their LLC interests equal their tax basis capital accounts plus their respective shares of nonrecourse liabilities. (Leave no answer blank. Enter zero if applicable.) c. Prepare a balance sheet for Cirque Capital immediately after…
Gaw Company owns 15% of the common stock of Trace Corporation and used the fair-value method to account for this investment. Trace reported net income of $110,000 for 2018 and paid dividends of $60,000 on October 1, 2018. How much income should Gaw recognize on this investment in 2018? What I have 110000 * .15= 1650060000 * .15 = 9000
! Required information [The following information applies to the questions displayed below.] The following information pertains to Rossow Corporation and its investee Reimer Company: a. Rossow purchased 1,900 shares of Reimer on July 12, 2021, for $72,200; b. Reimer reported $45,000 net income on December 31, 2021; c. Reimer's stock price was $44 on December 31, 2021; d. Reimer declared and paid a $3 per share cash dividend on May 1, 2022; e. Reimer reported $45,000 net income on December 31, 2022; and f. Reimer's stock price was $39 on December 31, 2022. 2. Prepare journal entries to record the facts in the case, assuming Rossow owns 43 percent of Reimer's stock. Reimer reported $45,000 of net income each year. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet A B C Record the purchase of 1,900 shares (43%) of Reimer Company for $72,200. The company will record the investment…
Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in exchange for consulting services he provided. If Cirque Capital had paid an outsider to provide the advice, it would have deducted the payment as compensation expense. Cirque Capital's balance sheet on the day Dave received his capital interest appears below: Assets: Cash Investments Land Basis $ 260,000 300,000 200,000 Totals $ 760,000 Liabilities and capital: $ 180,000 290,000 290,000 $ 760,000 Fair Market Value $ 260,000 322,000 390,000 $ 972,000 $ 180,000 396,000 396,000 Nonrecourse liabilities Tatsuki* Robert* Totals $ 972,000 *Assume that Tatsuki's basis and Robert's basis in their LLC interests equal their tax basis capital accounts plus their respective shares of nonrecourse liabilities. Note: Leave no answer blank. Enter zero if applicable.
On March 1, 2024, Garden Company invests $13,000 in Firs, Inc. stock. Firs pays Garden a $200 dividend on August 1, 2024. Garden sells the Firs' stock on August 31, 2024, for $13,350. Assume the investment is categorized as a short-term equity investment and Garden Company does not have significant influence over Firs, Inc 1. Journalize the transactions for Garden's investment in Firs' stock. 2. What was the net effect of the investment on Garden's net income for the year ended December 31, 2024
Required information [The following information applies to the questions displayed below.] Wasatch Corporation (WC) received a $200,000 dividend from Tager Corporation (TC). WC owns 15 percent of the TC stock. Compute WC's deductible DRD in each of the following situations: b. WC's taxable income (loss) without the dividend income or the DRD is $(10,000). Deductible DRD
Z Corporation has the following transactions relating to its investment during 2020: Jan 5 Acquired 16,000 shares of Y company for P1,500,000 paying an additional P10,000 for brokerage and P5,000 for commission. Feb 14 Received dividends from Y company declared January 10,2020 to the stockholders of records January 31,2020, P16,000. Required:prepare all the necessary entries assuming the investment is 1. Financial asset at Fair Value through profit and loss 2. Financial asset at Fair Value through other comprehensive income
nEED IN 10 MINUTES 9. On January 1, 20x1, an entity purchased marketable equity securities for P2,500,000. The entity paid commission and taxes of P190,000. The equity securities do not qualify as financial asset held for trading. The entity made irrevocable election to present unrealized gain and loss in other comprehensive income. The securities have a market value of P2,600,000, and P2,750,000 on December 31, 20x1 and December 31, 20x2. On July 1, 2022, half of the securities are sold for P1,400,000. On July 1, 2022, the net increase/ decrease in retained earnings account is (sample answer: 10,500 increase or 10,500 decrease)
X, resident citizen, had the following information for the year 2022:Gain from sale of office equipment, P20,000Gain from sale of land not used in business (selling price of P300,000), P100,000Gain from sale of shares of stock directly to the buyer, P50,000Gain from sale of shares of stock through the stock exchange (selling price, P200,000), P10,000Bad debt recovery, P50,000How much is the total capital gains tax?
Required information Skip to question [The following information applies to the questions displayed below.] Connie recently provided legal services to the Winterhaven LLC and received a 5 percent interest in the LLC as compensation. Winterhaven currently has $57,000 of accounts payable and no other liabilities. The current fair market value of Winterhaven's capital is $250,000. Note: Leave no answer blank. Enter zero if applicable. a. If Connie receives a 5 percent capital interest only, how much income must she report, and what is her tax basis in the LLC interest? b. If Connie receives a 5 percent profits interest only, how much income must she report, and what is her tax basis in the LLC interest? c. If Connie receives a 5 percent capital and profits interest, how much income must she report, and what is her tax basis in the LLC interest?