Kim purchased 500 shares in Prompt Messenger Services for $12,000 on November 21, 2021. The company went bankrupt on June 12, 2022, with no hope of recovery for the shareholders. On what date is the stock deemed to be worthless and what is the nature of the loss?

Kim purchased 500 shares in Prompt Messenger Services for $12,000 on November 21, 2021. The company went bankrupt on June 12, 2022, with no hope of recovery for the shareholders. On what date is the stock deemed to be worthless and what is the nature of the loss?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

John bought 1,000 shares of Intel stock on October 18, 2018 for $30 per share plus a $750 commission he paid to his broker. On December 12, 2022, he sells the shares for $42.50 per share. He also incurs a $1,000 fee for this transaction. What is John’s adjusted basis in the 1,000 shares of Intel stock? What amount does John realize when he sells the 1,000 shares? What is the gain/loss for John on the sale of his Intel stock? What is the character of the gain/loss?
A Corp. was incorporated in 2017. In 2019, Abel transferred machinery worth $200,000 (basis of $30,000) to A Corp. in exchange for 50% of A Corp.’s stock (FMV = $200,000). The transfer was not part of an integrated transaction, and the remaining 50% of A Corp.’s stock is owned by several other shareholders, all of whom acquired their shares during A Corp.’s initial incorporation in 2017.What is Abel’s basis in his A Corp. stock?
On February 4, 2017, Jonathon Cash bought 1,000 shares of Country Corporation stock for $6,800. On May 12, 2020, Jonathon sold all 1,000 shares of his Country Corporation stock for $5,400. After reading an article about a new product the company just released, he decided to buy 1,000 more shares of Country stock on June 3, 2020, for $3,450. What is Jonathon's recognized loss on his May sale of the Country stock, and what is his basis in the 1,000 shares he purchased in June?
At the beginning of 2022, Rose, Inc. purchased 8000 ordinary shares of Mark, Inc. for $800,000. The shares were designated as FVOCI investment. On July 31, 2022, Rose, Inc. sold all of its Mark, Inc.’s shares for $1,200,000. How much will be closed to Retained Earnings at the end of 2022 as a result of this sale?
The partnership of Anthony and Davis had an unprotitable year and agreed to liquidate their business on December 31, 2019. The Statement of Financial Position as of December 31, 2019 is presented below: ASSETS P 1,000 Cash P 80,000 20,000 Accounts Receivable Less Allowance for Bad Debts Merchandise Inventory Prepaid Advertising Office Equipment Less Accumulated Depreciation TOTAL ASSETS 60,000 50,000 2,000 P 100,000 60,000 40.000 P 153,000 LIABILITIES AND EQUITY Accounts Payable Notes Payable (due October 31, 2020) Anthony, Capital Davis, Capital P 20,000 86,000 30,000 17,000 P 153,000 TOTAL LIABILITIES AND EQUITY The information concerning liquidation are as follows: 1. Accounts receivable's net carrying value plus 20% of the estimated bad debts were collected. 2. Merchandise inventory were realized for P 25,000 3. The contract for Prepaid Advertising has a cancellation value of P 800. 4. Office Equipment were realized equal to 60% of their book value. 5. Unrecorded Accounts Payable…
Several years ago, Minjun, who is single, acquired § 1244 stock in Blue Corporation at a cost of $206,000. He sells the Blue stock for $20,600 in the current year. Determine the amount and nature of Minjun's gain or loss recognized this year. Minjun's sale of Blue Corporation stock produces a total loss of $185400 fill in the blank 1 of which $ fill in the blank 2 is treated as a capital loss. Please help with the second half of this question. I'm not understanding it at all
In 2010, Jeff received a nonqualified option to acquire 5,000 shares of his employer's stock at an exercise price of $15 per share. On that date, the stock traded at $15 per share. In 2012, Jeff exercised his option when the stock's price was $50 per share. In 2014, Jeff sold the stock for $120 per share. a) What is the amount and character (ordinary or capital gain) of income to Jeff in 2010, B) 2012? C) 2014?
XYZ Company purchased a machine at a cost of $ 125,000 on 30/5/2020. The machine is expected to have a $20,000 salvage value at the end of its 5-year useful life. Instructions: Compute the depreciation rate. Using the straight-line method, prepare a depreciation schedule, showing the annual depreciation expense for the machine over its 5-years life. Record the depreciation expense on 31/12/2020 in the general journal. What are the factors influencing the choice of the depreciation method of plant assets. (Note: Answer must be provided in tables) Depreciation. Rate Dep. Schedule : Year Depreciable cost Dep. Rate Annual Depreciation expenses Accumulated Depreciations Book Value 3-Journal entry for the first year Date accounts Dr Cr 4.
Vaibhav
Storytime Books, LLC purchased the following shares of ABC stock: 60 shares for $1,700 in 2017. 70 shares for $2,250 in 2018. 80 shares for $2,675 in 2019. They sold 160 shares of ABC in 2021 and did not identify which shares they sold. What basis should they use for computing gain or loss? (a) $5,108 (b) $4,971 (c) $4,953 (d) $4,942
Penny owns 501 shares of Mack Co. They have an adjusted cost base of $15.6 per share. On March 31, 2020, Penny sold all of her shares for $13.21 per share. After she sold the shares, the price fell further and on April 15, 2020, Penny purchased 263 of the same class of shares of Mack Co. for $10.67 per share. She was still holding all of the shares at the end of 2020. What is the adjusted cost base of the Mack Co shares Penny holds at the end of 2020?
Alex purchased $5000 worth of shares in a small biotech company on 1 September 2019. At 31 December 2019, the company declared and paid an interim dividend of $700 which was unfranked. What amount must Alex include in his assessable income for the 2020 year as ordinary or statutory income? a. $700 b. None of the above. c. $5,000 d. $1,000