= = Amount recognized
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Vine Corporation has a single class of common stock outstanding. Tillie owns 1,000 shares, which she purchased five years ago for $120,000. Vine declares a stock dividend payable in 8% preferred stock having a $230 par value. Each shareholder receives one share of preferred stock for ten shares of common stock. On the distribution date—December 16 of the current year—the common stock was worth $437 per share, and the preferred stock was worth $230 per share. On April 1 of the next year, Tillie sells half of her preferred stock for $12,000.
How much gain or loss must Tillie recognize when she sells the preferred stock? (Ignore the implications of Sec. 306 .)
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- Brilliant Ltd is a private limited by shares incorporated under Cap. 622. It has firstly issued 5,000 ordinary shares, and subsequently 10,000 8% redeemable preference shares. Both types of shares are issued at $2 each. All monies have been collected for the issued shares.The articles of association of Brilliant states that the preference dividend of the preference shares is to be paid out of yearly profits, and that the holders of the shares only have the right to vote at a meeting of the company when their dividend has not been paid or their rights are being varied.Brilliant has made substantial profits in the initial years and accumulated handsome profits on reserve. In recent years it applied some profits for expansion, but its business deteriorated after expansion. Though it still has positive profits reserve, it has not generated profits for a few years until the last year. In the past three years it did not declare a dividend. The preference shareholders are unhappy about not…Trish owns 250 shares of stock, with a basis of $2,500. The stock split 2 for 1. Trish now owns ______ shares at ______ per share.500 shares at $5 per share.500 shares at $10 per share.250 shares at $5 per share.250 shares at $10 per share.At the end of 20x6, Jabba the Hutt's Hot Dog Hut had 350,000 shares of $1 par value common stock issued and outstanding. In addition, Jabba had 94,000 shares of $5 par value, 10% cumulative preferred stock as part of his shareholder's equity. All of Jabba's stock, both common and preferred, has been outstanding since the company was incorporated at the beginning of 20x5. Jabba did not declare any dividends in 20x5, but he declares and pays a $140,000 cash dividend on December 31, 20x6. Determine the amount of cash that will be distributed to each class of Jabba's stockholders' equity for this two-year-old company. Calculation of preferred dividend: Total cash dividend To preferred shareholders To common shareholders Par Value per Preferred Share $ 0 Dividend Rate % Dividend per Number of Preferred Preferred Share Shares Preferred Dividend for two years
- The D asenso corp issued 5000 shares of common stock at 100.00 per share. Of this, Eugene owns 500 shares which he acquired at 100 per share. In December, 2013 the corporation declared and paid 25% stock dividend payable in preferred stock. Eugene sold all his stock dividend shares at 120 per share on February 10, 2014. Required: a. Compute the gain or loss on sale of stock dividend shares, assuming that at the time of payment of the stock dividend, the fair market value of the shares of stock are: Common: 110 per share Preferred: 110 per share b. Compute the capital gain due on said saleDuring 2021, Farewell Inc. had 500,000 shares of common stock and 50,000 shares of 6% cumulative preferred stock outstanding. The preferred stock has a par value of $100 per share. Farewell did not declare or pay any dividends during 2021. Farewell's net income for the year ended December 31, 2021, was $2.5 million. The income tax rate is 25%. Farewell granted 10,000 stock options to its executives on January 1 of this year. Each option gives its holder the right to buy 20 shares of common stock at an exercise price of $29 per share. The options vest after one year. The market price of the common stock averaged $30 per share during 2021. What is Farewell's diluted earnings per share for 2021, rounded to the nearest cent? O $3.14. O $4.90. $4.34. O Cannot determine from the given information.on January 1, T purchased both a bond and stock of CorporationX. The bond was purchased for $10,000, had a face value of $10,000 and paid 10% interest on December 31 of each year. The stock was purchased for $10,000 and paid a dividend of $1,000 on December 31. T sold both the stock and bond on July 1 of the same year. The bond sold for $10,300 and the stock for $11,000. What income, gain or loss, including character type (eg capital gain, interest, dividend, ordinary will T recognize as a result of the sales?
- Vine Corporation has a single class of common stock outstanding. Tia owns 1,000 shares, which she purchased five years ago for $180,000. Vine declares a stock dividend payable in 8% preferred stock having a $130 par value. Each shareholder receives one share of preferred stock for ten shares of common stock. On the distribution date-January 2 of the current year the common stock was worth $247 per share, and the preferred stock was worth $130 per share. On April 1 of the current year, Tia sells half of her preferred stock for $11,000. Read the requirements. (Complete all input fields. Enter a 0 where appropriate.) Requirements a. b. C. How much income must Tia recognize when she receives the stock dividend? How much gain or loss must Tia recognize when she sells preferred stock? (Ignore the implications of Sec. 306.) What is Tia's basis in her remaining common and preferred shares after the sale? When does her holding period for the preferred shares begin? Print Done XOn December 10, Daniel Co. split its stock 5-for-2 when the market value was P65 per share. Prior to the split, Daniel had 200,000 shares of P15 par value stock. After the split, Daniel's outstanding shares would beMr. Smith had the following stock transactions: - Purchase of 100 shares of AXI Corporation on September 21, 2021 for $5,000. - Purchase of 50 shares of substantially identical stock on December 21, 2021 for $2,750. -Purchase of 25 additional shares of such stock on December 26, 2021 for $1,125. - On January 2, 2022, sold for $4000 the 100 shares purchased on September 21, 2021. Question: How much is the nondeductible loss? Explain briefly.
- Shetland Corporation, a C corporation, has E&P of $1,000,000. The corporation stock is held as follows: Matthew 1,000 shares Aaron 1,000 shares Fay 1,000 shares Marlyebone Partnership 1,000 shares Devon Corp. 1,000 shares Total Shares 5,000 shares Matthew would like to redeem 500 shares of stock. The fair market value of the stock is $200,000. Matthew acquired the stock 10 years ago and has a basis of $200/share in her stock. Note: Since Shetland Corporation is not traded on an exchange, Matthew does not have the option for selling his stock on an open market. Here is additional information about Shetland Corporation: Aaron is Matthew’s first cousin Fay is Matthew’s mother Matthew owns 10% of Marlyebone Partnership Matthew owns 20% of the shares in Devon Corporation Will this…Alpha Corporation has outstanding four hundred shares of $100 par value common stock, which has been issued and sold at $105 per share for a total of $42,000. Alpha is incorporated in State X, which has adopted the earned surplus test for all distributions. At a time when the assets of the corporation amount to $65,000 and the liabilities to creditors total $10,000, the directors learn that Rachel, who holds one hundred of the four hundred shares of stock, is planning to sell her shares on the open market for $10,500. Believing that this will not be in the best interest of the corporation, the directors enter into an agreement with Rachel to buy the shares for $10,500 from her. About six months later, when the assets of the corporation have decreased to $50,000 and its liabilities, not including its liability to Rachel, have increased to $20,000, the directors use $10,000 to pay a dividend to all of the shareholders. The corporation later becomes insolvent. a. Does Rachel have any…9. Mr. JFINEX owns 100 shares of stock in Finance Corporation with a market value of 30,000. The Company declares a stock dividend of 20%. How many shares does JFINEX own after? A) 120 shares with a market value of 24,000 B) 100 shares with a market value of 24,000 C) 120 shares with a market value of 30,000 D) 80 shares with a market value of 30,000
