Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Incorporated (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows: Note: Leave no answer blank. Enter zero if applicable. Negative amounts should be indicated by a minus sign. Cash Receivables Building Land Total Payables FMV $ 18,000 26,000 105,000 229,000 $ 378,000 Adjusted Tax Basis $ 18,000 26,000 52,500 98,000 Appreciation $ 194,500 52,500 131,000 $ 183,500 $ 29,000 124,000 $ 153,000 Mortgage Total $ 29,000 124,000 $ 153,000 The mortgage is attached to the building and land. Ernesto was asking for $549,000 for the company. His tax basis in the BLI stock was $180,000. Included in the sales price was an unrecognized customer list valued at $180,000. The unallocated portion of the purchase price ($144,000) will be recorded as goodwill. Assume Ernesto agrees to sell his stock in BLI to Amy and Brian for $549,000. b. What amount of gain or loss does Ernesto recognize if the transaction is structured as a stock sale to Amy and Brian? Gain or loss recognized

! Required information [The following information applies to the questions displayed below.] Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Incorporated (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows: (Leave no answer blank. Enter zero if applicable. Negative amounts should be indicated by a minus sign.) Cash Receivables Building Land Total Payables Mortgage* FMV 15,000 22,000 95,000 204,000 $ 336,000 $ 24,000 113,000 $ 137,000 Total * The mortgage is attached to the building and land. Gain or loss recognized Corporate-level tax Adjusted Tax Basis $ 15,000 22,000 47,500 44,000 $ 128,500 $ $ $ 24,000 113,000 $ 137,000 Ernesto was asking for $432,000 for the company. His tax basis in the BLI stock was $165,000. Included in the sales price was an unrecognized customer list valued at…

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Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Inc. (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows:     FMV   Adjusted Basis   Appreciation Cash $ 16,000   $ 16,000       Receivables   17,500     17,500       Building   102,000     51,000     51,000 Land   249,000     83,000     166,000 Total $ 384,500   $ 167,500   $ 217,000                   Payables $ 24,300   $ 24,300       Mortgage*   110,250     110,250       Total $ 134,550   $ 134,550           * The mortgage is attached to the building and land.  Ernesto was asking for $482,700 for the company. His tax basis in the BLI stock was $192,000. Included in the sales price was an unrecognized customer list valued at $132,000. The unallocated portion of the purchase price ($100,750) will be recorded as…

Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Inc. (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows:     FMV Adjusted Basis AppreciationCash$25,500 $25,500 Receivables 23,200 23,200 Building 133,000 66,500 66,500Land 272,250 90,750 181,500Total$453,950 $205,950 $248,000 Payables$23,000 $23,000 Mortgage* 150,000 150,000 Total$173,000 $173,000     * The mortgage is attached to the building and land. Ernesto was asking for $568,950 for the company. His tax basis in the BLI stock was $148,000. Included in the sales price was an unrecognized customer list valued at $196,000. The unallocated portion of the purchase price ($92,000) will be recorded as goodwill. (Negative amounts should be indicated by a minus sign.)

Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Inc. (BLI).  As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet.  The relevant information is summarized as follows:                           PMV                  Adjusted Bais              Appreciation Cash                 $14,000             $14,000 Receivables      $19,100              $19,100 Building            $130,000            $65,000                       $65,000 Land                 $247,500            $82,500                      $165,000 Total                  $410,600           $180,600                    $230,000 Payables            $23,900             $23,900 Mortage*            138,000              $138,000 Total                   $161,900             $161,900 *The mortage is attached to the building and land Ernesto was asking for $535,450 for the company.  His tax basis is in the…

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Direction: Read the following case study and answer the question: During the period, the business acquires an equipment costing P150,000 in cash. The owner of the business is questioning why you as his accountant, did not include the P150,000 equipment as one of the items of operating expense in the income statement which resulted in a higher income tax of the business?

c. Assume the same facts as above and in part (b), except that Washi’s net income included a loss on discontinued operations of $33,000 (net of tax). Prepare the journal entries necessary to record Flounder’s equity in the net income of Washi for 2023. Ignore income taxes. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit enter an account title to record investment income and loss enter a debit amount enter a credit amount enter an account title to record investment income and loss enter a debit amount enter a credit amount enter an account title to record investment income and loss enter a debit amount enter a credit amount (To record investment income and loss)     enter an account title to record depreciation…

Good afternoon Please help with question. Thanks in advance Full Tax Co. is incorporated and tax resident in Barbados. The audited financial statements for Full Tax Co. for year-end December 31, 2021, show an accounting profit after tax of $5,500,000 after charging the following: Depreciation $1,500,000 Tax $500,000 Property Tax $900,000 Interest expense $15,000 Preference dividends of $40,000 Legal fees $1,110,000 Insurance of $750,000 Bad debts $40,000 Foreign Travel $20,000 Repairs and Maintenance $1,500,000 General expenses $600,000 Other Information Property Tax of $500,000 was paid for the property on which the company’s factory is located; $300,000 for the office premises and $100,000 for the director’s home. The insurance was paid for the factory and office premises. The bad debt expense includes a general provision of $10,000 and a specific provision of $30,000. The company paid interim ordinarily dividends totaling $100,000 Repairs and Maintenance include for $500,000…