[ineAmy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Incorporated (BLI). As part oftheir discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's taxaccounting balance sheet. The relevant information is summarized as follows:•CashReceivablesBuildingLandTotalPayablesMortgage*TotalFMV$ 29,00017,300Adjusted TaxBasis$ 29,000Appreciation17,300124,50062,250295,50098,500$ 466,300$ 207,05062,250197,000$ 259,250$ 21,400161,000$ 182,400$ 21,400161,000$ 182,400The mortgage is attached to the building and land.Ernesto was asking for $500,650 for the company. His tax basis in the BLI stock was $114,000. Included in the sales pricewas an unrecognized customer list valued at $117,000. The unallocated portion of the purchase price ($99,750) will berecorded as goodwill.Note: Negative amounts should be indicated by a minus sign.Problem 19-57 Part a (Algo)a. What amount of gain or loss does BLI recognize if the transaction is structured as a direct asset sale to Amy and Brian? What amountof corporate-level tax does BLI pay because of the transaction?

Cash Paid (A)$500,650Liabilities assumed (B)$182,400Amount realized (C=A+B)$683,050Adjusted basis…

Problem 19-57 Part a (Algo) a. What amount of gain or loss does BLI recognize if the transaction is structured as a direct asset sale to Amy and Brian? What amount of corporate-level tax does BLI pay because of the transaction?

Problem 19-57 Part a (Algo) a. What amount of gain or loss does BLI recognize if the transaction is structured as a direct asset sale to Amy and Brian? What amount of corporate-level tax does BLI pay because of the transaction?

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter22: S Corporations

Section: Chapter Questions

Problem 42P

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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 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.)
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: Cash Receivables Building Land Total Payables Mortgage* Total FMV $ 28,800 17,600 Adjusted Tax Basis $ 28,800 Appreciation 17,600 145,600 252,000 72,800 84,000 $ 444,000 $ 203,200 72,800 168,000 $ 240,800 $ 21,600 126,800 $ 21,600 126,800 $ 148,400 $ 148,400 * The mortgage is attached to the building and land. Ernesto was asking for $546,100 for the company. His tax basis in the BLI stock was $163,000. Included in the sales price was an unrecognized customer list valued at $148,000. The unallocated portion of the purchase price ($102,500) will be recorded as goodwill. Note: Negative amounts…
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 $ 14,500 $ 14,500 Receivables 18,800 18,800 Building 102,500 51,250 51,250 Land 260,250 86,750 173,500 Total $ 396,050 $ 171,300 $ 224,750 Payables $ 19,100 $ 19,100 Mortgage* 159,000 159,000 Total $ 178,100 $ 178,100 * The mortgage is attached to the building and land. Ernesto was asking for $445,700 for the company. His tax basis in the BLI stock was…
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 Appreciation Cash $ 14,500 $ 14,500 Receivables 18,800 18,800 Building 102,500 51,250 51,250 Land 260,250 86,750 173,500 Total $ 396,050 $ 171,300 $ 224,750 Payables $ 19,100 $ 19,100 Mortgage* 159,000 159,000 Total $ 178,100 $ 178,100 * The mortgage is attached to the building and land. Ernesto was asking for $445,700 for the company. His tax basis in the BLI stock was…
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: Cash Receivables Building Land Total Payables Mortgage* Total FMV $ 14,000 21,000 94,000 204,000 $333,000 $ 25,000 $ 25,000 108,000 108,000 $133,000 $133,000 Adjusted Basis $ 14,000 Gain or loss recognized Corporate-level tax 21,000 47,000 74,000 $156,000 Show Transcribed Text The mortgage is attached to the building and land. Ernesto was asking for $470,000 for the company. His tax basis in the BLI stock was $150,000. Included in the sales price was an unrecognized customer list valued at $150,000. The unallocated portion of the purchase price ($120,000) will be recorded as goodwill. (Leave no answer blank. Enter zero if applicable.) Assume Ernesto agrees to sell his stock in BLI to Amy…
Required information Problem 19-57 (LO 19-4) (Algo) [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: Adjusted Tax Basis $ 31,500 17,000 Cash Receivables Building Land Total Payables Mortgage* Total FMV $ 31,500 17,000 113,500 273,000 $435,000 56,750 91,000 $ 196,250 $22,300 $ 22,300 182,250 182,250 $ 204,550 $ 204,550 Appreciation 56,750 182,000 $ 238,750 *The mortgage is attached to the building and land. Ernesto was asking for $450,200 for the company. His tax basis in the BLI stock was $120,000. Included in the sales price was an unrecognized customer list valued at $138,000. The unallocated portion of the purchase price ($81,750) 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: 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…
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. FMV Adjusted Tax Basis Appreciation Cash $ 10,000 $ 10,000 Receivables 15,000 15,000 Building 100,000 50,000 50,000 Land 225,000 75,000 150,000 Total $ 350,000 $ 150,000 $ 200,000 Payables $ 18,000 $ 18,000 Mortgage* 112,000 112,000 Total $ 130,000 $ 130,000 * The mortgage is attached to the building and land. Ernesto was asking for $400,000 for the company. His tax basis in the BLI stock was $100,000. Included in the sales price was an unrecognized customer list valued at $100,000. The unallocated portion of the purchase price…
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 Mortgage Total FMV 12,000 19,000 77,000 165,000 $ 273,000 $ 22,000 87,000 $ 109,000 Adjusted Tax Basin $ 12,000 19,000 38,500 105,000 $ 174,500 Gain or loss recognized Corporate-level tax $ 22,000 87,000 $ 109,000 Appreciation 38,500 60,000 $ 98,500 *The mortgage is attached to the building and land. Ernesto was asking for $402,000 for the company. His tax basis in the BLI stock was $100,000. Included in the sales price was an unrecognized customer list valued at $100,000. The unallocated portion of the purchase price ($138,000)…
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.) FMV Adjusted Tax Basis Appreciation Cash $ 6,000 $ 6,000 Receivables 9,000 9,000 Building 114,000 57,000 57,000 Land 248,000 78,000 170,000 Total $ 377,000 $ 150,000 $ 227,000 Payables $ 11,000 $ 11,000 Mortgage* 134,000 134,000 Total $ 145,000 $ 145,000 * The mortgage is attached to the building and land. Ernesto was asking for $574,000 for the company. His tax basis in the BLI stock was $190,000. Included in the sales price was an unrecognized customer list valued at $190,000. The unallocated portion of the purchase price…
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.) Ad justed Tax Basis $ 6,000 9,000 56,500 139,000 $ 210,500 PMV Appreciation Cash Receivables Building $ 6,000 9,000 113,000 239,000 ६ 367,000 56,500 100,000 $ 156,500 Land Total Payables Mortgage $ 12,000 132,000 $ 144,000 $ 12,000 132,000 $144,000 Total * The mortgage is attached to the building and land. Ernesto was asking for $493,000 for the company. His tax basis in the BLI stock was $150,000. Included in the sales price was an unrecognized customer list valued at $150,000. The unallocated portion of the purchase price ($120,000) will be recorded as goodwill. Assume Ernesto…