FINANCIAL ACCOUNTING
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Rivendell Corporation uses the accrual method of accounting and has the following assets as of the end of 2020. Rivendell converted to an S corporation on January 1, 2021. (Leave no answer blank. Enter zero if applicable.)
Asset Adjusted Basis FMV
Cash $ 40,000 $ 40,000
Accounts receivable 30,000 30,000
Inventory 130,000 60,000
Land 100,000 125,000
Totals $ 300,000 $ 255,000
a. What is Rivendell’s net unrealized built-in gain at the time it converted to an S corporation?
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