Vine Corporation has a single class of common stock outstanding. Tia owns 1,000 shares, which she purchased five years ago for $180,000. Vine declares a stock dividend payable in 8% preferred stock having a $130 par value. Each shareholder receives one share of preferredstock for ten shares of common stock. On the distribution date-January 2 of the current year the common stock was worth $247 per share, and the preferred stock was worth $130 per share. On April 1 of the current year, Tia sells half of her preferred stock for $11,000.Read the requirements.(Complete all input fields. Enter a 0 where appropriate.)Requirementsa.b.C.How much income must Tia recognize when she receives thestock dividend?How much gain or loss must Tia recognize when she sellspreferred stock? (Ignore the implications of Sec. 306.)What is Tia's basis in her remaining common and preferred shares afterthe sale? When does her holding period for the preferred shares begin?PrintDoneX

Answer:- Stock dividend meaning:- The dividend is the portion of profits that shareholders receive…

Answered: Vine Corporation has a single class of…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter13: Corporations: Earning & Profits And Distributions

Section: Chapter Questions

Problem 29P

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EllaJane Corporation was organized several years ago and was authorized to issue 4,000,000 shares of $50 par value 6% preferred stock. It is also authorized to issue 1,750,000 shares of $1 par value common stock. In its fifth year, the corporation has the following transactions: Journalize the transactions.
Vine Corporation has a single class of common stock outstanding. Tillie owns 1,000 shares, which she purchased five years ago for $120,000. Vine declares a stock dividend payable in 8% preferred stock having a $230 par value. Each shareholder receives one share of preferred stock for ten shares of common stock. On the distribution date—December 16 of the current year—the common stock was worth $437 per share, and the preferred stock was worth $230 per share. On April 1 of the next year, Tillie sells half of her preferred stock for $12,000. How much gain or loss must Tillie recognize when she sells the preferred stock? (Ignore the implications of Sec. 306 .) Do not give answer in image
Corporation has a single class of common stock outstanding. Tabitha owns 1,000 shares, which she purchased five years ago for $120,000. Rose declares a stock dividend payable in 8% preferred stock having a $50 par value. Each shareholder receives one share of preferred stock for ten shares of common stock. On the distribution date—January 2 of the current year—the common stock was worth $95 per share, and the preferred stock was worth $50 per share. On April 1 of the current year, Tabitha sells half of her preferred stock for $9,200. a. How much income must Tabitha recognize when she receives the stock dividend? b. How much gain or loss must Tabitha recognize when she sells the preferred stock? (Ignore the implications of Sec. 306.) c. What is Tabitha's basis in her remaining common and preferred shares after the sale? When does her holding period for the preferred shares begin?
3) JetNew issued 50,000 common shares on January 1, 2020 at $8 each. Preferred shares were issued on March 15, 2020 at $10 each with a dividend rate of $0.50. JetNew sold 20,000 of these shares. On November 15, in order to buy into the business, another shareholder offered up a building valued at $300,000 for 30,000 common shares. At the time of this transaction JetNew shares were trading at $9. Prepare the required journal entries.
Primus, Inc., owns all outstanding stock of Sonston, Inc. For the current year, Primus reports net income (exclusive of any investment income) of $600,000. Primus has 100,000 shares of common stock outstanding. Sonston reports net income of $200,000 for the period with 40,000 shares of common stock outstanding. Sonston also has 10,000 stock warrants outstanding that allow the holder to acquire shares at $10 per share. The value of this stock was $20 per share throughout the year. Primus owns 2,000 of these warrants. What amount should Primus report for diluted earnings per share?
Thriller Corporation has one class of voting common stock, of which 1,000 shares are issued and outstanding. The shares are owned as follows: Joe Jackson 400 Mike Jackson (Joe’s son) 200 Jane Jackson (Joe’s daughter) 200 Vinnie Price (unrelated) 200 Total shares 1,000 Thriller Corporation has current E&P of $400,000 for this year and accumulated E&P at January 1 of this year of $60,000. During this year, the corporation made the following distributions to its shareholders: 03/31: Distributed $100 per share to each shareholder ($100,000 in total). 06/30: Distributed $100 per share to each shareholder ($100,000 in total). 09/30: Distributed $100 per share to each shareholder ($100,000 in total). 12/31: Redeemed all of Vinnie’s shares for $250,000 in cash. a. Determine the tax status of each distribution made this year. treatment distribution on 3/31 joe distribution on 6/30 vinnie distribution on 9/30 distribution on 12/31…
Lea Inc, owned 900,000 shares of Mia Corporation stock. On December 31, 2010, when Lea's account "Investment in Common Stock of Mia Corporation" has a carrying value of P5 per share, Lea distributed these shares to its stockholders as a dividend. Lea originally paid P8 for each share. Lea has 300,000 shares issued and outstanding, which are traded on a national stock exchange. The quoted market price for a Mia share was P7 on the declaration date and P9 on distribution date. What would be the reduction in Lea's stockholder's equity as a result of the above transactions? Group of answer choices A. P3,600,000 B. P7,200,000 C. P2,100,000 D.P4,500,000
Plymouth Corporation has only one class of stock. There are 84,000 shares outstanding. During 20X1, the corporation's net income after taxes was $672,000. The policy of the corporation is to declare dividends equal to 20 percent of its net income. Elaine White owns 290 shares of the stock. How much will White receive as a dividend on these shares?
14. On March 4, 20x3, Evan Co. purchased 1,000 shares of LVC common stock (ordinary shares) at P80 per share. On September 26, 20x3, Evan received 1,000 stock rights to purchase an additional 1,000 shares at P90 per share. The stock rights had an expiration date of February 1, 20x4. On September 30, 20x3, LVC's common stock had a market value, ex-rights, of P95 per share and the stock rights had a market value of P5 each. What amount should Evan report on its September 30, 20x3 balance sheet as the cost of its investment in stock rights? a. 4,000 b. 5,000 c. 10,000 d. 0 (AICPA)
On March 1, 20X5, Rya Corp. issued 1,000 shares of its $20 par value common stock and 2,000 shares of its $20 par value convertible preferred stock for a total of $80,000.At this date, Rya's common stock was selling for $36 per share, and the convertible preferred stock was selling for $27 per share.What amount of the proceeds should be allocated to Rya's convertible preferred stock?
Jackson Corporation is owned by three individuals: Annie, Betty, and Charlotte. There is one class of voting common stock outstanding. Annie owns 40 shares with a basis of $100 per share. Betty owns 25 shares with a basis of $100 per share. Charlotte owns 35 shares with a basis of $50 per share. All of the shareholders have held their stock interests for over one year. The fair market value of the common stock is $200 per share. Jackson Corporation has E&P of $5,000.Required: What are the tax consequences to the shareholders under each of thefollowing alternative redemption transactions (ie. amount and character of any realized or recognized gain or loss and basis of any remaining shares)? For each transaction, be sure to discuss the applicability of a, b, and c.a. Jackson redeems 10 shares from Annie for $200 per share. All of the shareholders are unrelated.b. Jackson redeems all 25 of Betty’s shares for $80 per share. Betty is Annie’s granddaughter. Charlotte is unrelated to the…
Baskin purchased 24,000 common shares (15%) of Robbin on January 1, Year 5, for $293,000 and classified the investment as FVTPL. Robbin reported net income of $103,000 in Year 5 and $108,000 in Year 6, and paid dividends of $58,000 in each year. Robbin's shares were trading at $16 per share on December 31, Year 5, and January 1, Year 6. On January 1, Year 6, Baskin obtained significant influence over the operating, investing, and financing decisions of Robbin when the controlling shareholder sold some shares in the open market and lost control over Robbin. Accordingly, the investment in Robbin was reclassified to an investment in associate. On December 31, Year 6, Baskin sold its investment in Robbin for $17 per share. Required: Prepare all journal entries for Years 5 and 6 related to Baskin's investment in Robbin. Date January 1, Year 5 December 31, Year 5 December 31, Year 5 Date December 31, Year 6 December 31, Year 6 December 31, Year 6 General Journal Investment in Robbin Cash…

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