FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Related questions
Question
Sylvia is the sole shareholder of Strained Ltd., a taxable Canadian corporation. Sylvia transferred a non-
Cash $3,000
Debt 2,000
Common Shares (FMV and legal stated capital) 30,000
Total 50,000
Sylvia and Strained Ltd. made a joint election under section 85, electing a transfer price of $40,000.
The cost to Sylvia of the common shares received as consideration is:
Select one:
A) $35,000
B) $23,000
C) $23,333
D) $20,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by stepSolved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- X Corp, a personal holding company, is owned by two individuals and has gross income as follows: $30,000 gross profits from sales, tax-exempt interest of $3,000, dividends of $5,000 from a 10% owned corporation, and taxable interest of $40,000. What is the amount of X Corp's personal holding company income?arrow_forwardSunrise Corporation owns 30% of Sunset Corporation. Both are domestic corporations. Sunset pays a $10,000 dividend to Sunrise. What amount of dividend income will be included in the taxable income of Sunrise Corporation? $6,500. $3,500. $10,000. $3,000.arrow_forwardZhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the corporation had the following fair market values and adjusted bases: FMV Adjusted Basis 60,000 $ 30,000 Inventory Building Land Total 450,000 690,000 $1,200,000 300,000 900,000 $1,230,000 The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporation's stock received in the exchange was $1,100,000. The transaction met the requirements to be tax-deferred under $351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) Assume the corporation assumed a mortgage of $1,300,000 attached to the building and land. Assume the fair market value of the building is now $750,000 and the fair market value of the land is $1,590,000. The fair market value of the stock remains $1,100,000. e. How…arrow_forward
- Wasatch Corporation (WC) received a $200,000 dividend from Tager Corporation (TC). WC owns 15 percent of the TC stock. Compute WC's deductible dividends - received deduction (DRD) in each of the following situations: Required: a. WC's taxable income (loss) without the dividend income or the DRD is $10,000. b. WC's taxable income (loss) without the dividend income or the DRD is $(10,000). c. WC's taxable income (loss) without the dividend income or the DRD is $(99,000). d. WC's taxable income (loss) without the dividend income or the DRD is $(101,000). e. WC's taxable income (loss) without the dividend income or the DRD is $(500,000). f. What is WC's book - tax difference associated with its DRD in part (a)? Is the difference favorable or unfavorable? Is it permanent or temporary? Answer is not complete. Complete this question by entering your answers in the tabs below. WC's taxable income (loss) without the dividend income or the DRD is $10,000. Wasatch Corporation (WC) received a…arrow_forwardQ Ltd., a Canadian corporation, owns 100% of the shares of R Ltd. The R shares have an ACB of $110,000 and are now worth $230,000. R's only asset is land having a cost of $80,000 and a current value of $230,000. The land was worth $110,000 when Q purchased R's shares. Both corporations have September 30 year-ends. On October 31 R is wound up into Q. What is the ACB of the land in Q after the wind-up? $ 80000arrow_forwardCorporation P owns 93 percent of the outstanding stock of Corporation T. This year, the corporation’s records provide the following information: Corporation P Corporation T Ordinary operating income (loss) $ 500,000 $ (200,000) Capital gain (loss) (8,300) 6,000 Section 1231 gain (loss) (1,000) 5,000 Required: Compute each corporation’s taxable income if each files a separate tax return. Compute consolidated taxable income if Corporation P and Corporation T file a consolidated tax return. My solutions: 1. Corporation P: $499,000 and Corporation T: ($189,000), 2. $310,000 I missed this problem on my homework. Could you please explain how to get the correct answer?arrow_forward
- Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation’s stock. The property transferred to the corporation had the following fair market values and adjusted bases: FMV Adjusted Basis Inventory $ 60,000 $ 30,000 Building 450,000 300,000 Land 690,000 900,000 Total $ 1,200,000 $ 1,230,000 Assume the corporation assumed a mortgage of $1,300,000 attached to the building and land. Assume the fair market value of the building is now $750,000 and the fair market value of the land is $1,590,000. The fair market value of the stock remains $1,100,000. What is the corporation’s adjusted basis in each of the assets received in the exchange?(Do not round intermediate calculations.)arrow_forwardMr. ABC sold shares of resident foreign corporation directly to a buyer. The shaes were purchased for P200,000 and were sold at a net selling price of P420,000. Compute the capital gain tax. A. P 33.000B. P 22,000C. P 11,000D. zeroarrow_forwardN Corporation has E&P of $240,000. It distributes land with a fair market value of $70,000 (adjusted basis of $25,000) to its sole shareholder, Rory. The land is subject to a liability of $55,000 that Rory assumes. Rory has: Question 16 options: A taxable dividend of $15,000 A taxable dividend of $25,000 A taxable dividend of $45,000 A taxable dividend of $55,000 A taxable dividend of $70,000arrow_forward
- This year, GHJ, Incorporated received the following dividends:BP, Incorporated (a taxable California corporationin which GHJ holds a 4% stock interest) MN, Incorporated (a taxable Florida corporation in which GHJ holds a 53% stock interest)$ 20,90082,600AB, Incorporated (a taxable French corporation in which GHJ holds a 30% stock interest)20,900Required:Compute GHJ's dividends-received deduction.arrow_forward(1) DEF Corporation distributes a building to Jones, an individual and fifty (50) percent shareholder. The building has a FMV of $50,000 and an adjusted basis of $32,000. Without considering the distribution of the building to Jones, DEF Corporation had earnings and profits of $26,500. Jones adjusted basis in his interest in DEF Corporation was equal to $15,000. (a) What is the amount of the section 301 distribution to Jones? (b) What is Jones' basis in the building following its distribution to Jones? (c) What is the amount of gain recognized by DEF Corporation as a result of the distribution of the building to Jones? (d) What is the character of the distribution to Jones and what is the amount of DEF's earnings and profits following the distribution?arrow_forwardWasatch Corporation (WC) received a $200,000 dividend from Tager Corporation (TC). WC owns 15 percent of the TC stock. Compute WC's deductible dividends-received deduction (DRD) in each of the following situations: Required: a. WC's taxable income (loss) without the dividend income or the DRD is $10,000. b. WC's taxable income (loss) without the dividend income or the DRD is $(10,000). c. WC's taxable income (loss) without the dividend income or the DRD is $(99,000). d. WC's taxable income (loss) without the dividend income or the DRD is $(101,000). e. WC's taxable income (loss) without the dividend income or the DRD is $(500,000). f. WC's taxable income (loss) without the dividend income or the DRD is $10,000. What is WC's book-tax difference associate with its DRD? Is the difference favorable or unfavorable? Is it permanent or temporary? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D DRD WC's taxable income (loss)…arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education