Miss Wells has purchased the shares of two companies over the years. Each company has onlyone class of shares. Purchases and sales of shares in the first of these companies, Memo Inc.,are as follows:February, 2015 purchaseNovember, 2016 purchaseApril, 2017 purchaseOctober, 2017 saleSeptember, 2019 purchaseNovember, 2019 sale60 @ $2490 @ 2845 @30(68) @3622 @26(53) @40Purchases and sales of shares in the second company, Demo Ltd., are as follows:April, 2018 purchaseDecember, 2018 purchaseJuly, 2019 sale$24160 @(260) @ 3620033Required:A. Determine the cost to Miss Wells of the Memo Inc. shares that are still being held onDecember 31, 2019.B. Determine the taxable capital gain resulting from the July, 2019 disposition of the DemoLtd. shares.

Average cost per share = Total purchases / number of shares held Gain or lass on shares…

A. Determine the cost to Miss Wells of the Memo Inc. shares that are still being held on December 31, 2019. B. Determine the taxable capital gain resulting from the July, 2019 disposition of the Demo Ltd. shares.

A. Determine the cost to Miss Wells of the Memo Inc. shares that are still being held on December 31, 2019. B. Determine the taxable capital gain resulting from the July, 2019 disposition of the Demo Ltd. shares.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Rossow purchased 1,900 shares of Reimer on July 12, 2021, for $72,200; Reimer reported $45,000 net…

A: Equity method of accounting investment is used when the ownership is more than 20% .Equity Method of…

Q: On January 1, 2019, Dermot Company purchased 15% of the voting common stock of Horne Corp. On…

A: In the given scenario, the Dermot Company initially obtained 15% of the voting shares of Horne Corp…

Q: In 2019, Martin and Rebecca formed White Corporation. Martin transfers real estate with an adjusted…

A: Hey, since there are multiple questions posted, we will answer the first question. If you want any…

Q: On January 1, 2018, Dermot Company purchased 12% of the voting common stock of Horne Corp. On…

A: Accounting for investments involves recording and reporting the value and income of an entity's…

Q: Required information [The following information applies to the questions displayed below.] Julio and…

A: Answer:- Ordinary income refers to the regular and recurring income that a taxpayer receives from…

Q: What is the minimum taxable capital gain to be reported in the current year.

A: CAPITAL ASSETS :- A capital asset is an item that you own for investment or personal purposes, such…

Q: ass corporation as defined) with a 31 March 2022 year of assessment. Calculate the tax inv(loss) for…

A: Capital Gains/ Losses: When a company or individual sold or disposed off the capital assets more or…

Q: Loss on sale of A Corp, stock (IP owned for 18 months) Loss on sale of B Corp Stock (TP owned for 11…

A: When we sale our assets for more than the adjusted basis, it's capital gain and when we sale our…

Q: What amount of dividend income and/ or capital gain will Ellyn recognize as a result of the cash…

A: aNSWER

Q: Of $50,00 investment is going to be accounted for at fair value through other comprehensive income…

A: Journal entries…

Q: Sun Ltd., with a taxation year that ends on December 31 and has a Class 8 UCC balance on January 1,…

A: CCA stands for Capital Cost Allowance. It is a tax deduction that can be claimed annually on…

Q: D sold capital property in the current year for net proceeds of $700,000. The property has an…

A: A capital asset is an item that you own for investment or personal purposes, such as stocks, bonds…

Q: Manny Kant is invested two passive activities: Categorical, LLC and Imperative, Inc. As of 1/1/2019…

A: Investment refers to the allocation of the money in order to earn benefit over the money invested.

Q: Net capital loss carry-over from 2019 is $30, Non capital loss carry-over from 2019 is $70 Required…

A: Pay as you earn system or tax deduction at source in some countries are the advance tax payment…

Q: Statement 1: The value of property acquired by gift, bequest, devise, or descent, as well as the…

A: Statement 1: The value of property acquired by gift, bequest, devise, or descent shall be excluded…

Q: D sold capital property in the current year for net proceeds of $800,000. The property has an…

A: Capital gain means the gain arises from the transfer of the capital asset or increase in the price…

Q: Some stock in a calendar-year S corporation is sold to a nonresident alien on February 13, 2020. On…

A: Partnerships, corporations and non-resident aliens do not qualify as eligible shareholders.

Q: On January 1, 2019, Audrey acquired a 30% interest in ABC, an existing LLC. In exchange for her…

A: On 01.01.2019, Audrey acquired 30% interest in ABC company, LLC Audrey paid cash = $80000…

Q: Assume that TDW Corporation ( calendar year-end) has 2022 taxable income of 654,000 for purposes of…

A: Answer:- Depreciation meaning:- Depreciation is the term for the decline in value of tangible asses…

Q: oline has the following capital gain and loss transactions for 2021. a. Short-term capital gain…

A: Answer with calculation are as follows

Q: On April 23, 2020, Auk Corporation acquires 100% of the outstanding stock of Amazon Corporation (E &…

A: Acquisition is a process of acquiring one company by the other company. The reason for the…

Q: Nadia transfers to Hillside Corporation depreciable machinery originally costing $18,000 and now…

A: As per IRS, if a person transfer his property in a corporation only for stocks and immediately after…

Q: vanhoe Corp. owned 21200 shares of Oriole Corp., which had been purchased in 2019 for $296800. On…

A: One kind of dividend payment that a business might make to its shareholders that takes the form of…

Q: December 31, 2020 and December 31, 2021. Prepare entry A to recognize allocations attributed to…

A: A journal entry is a record of a business transaction in your business books.

Q: Would you please explain how to find the minimum taxable capital gain to be reported in Year 2?…

A: CAPITAL ASSETS :- A capital asset is an item that you own for investment or personal purposes, such…

Q: On January 1, 2022, an investor purchases for $320,000 a 15% ownership in an investee. The…

A: When the investor can exert significant influence, the equity method is applied. Under this method,…

Q: qual to $32,000. On December 31, 2022, the fair value of the investor's share of the investee is…

A: When the investor can exert significant influence, the equity method is applied. Under this method,…

Q: In 2021, Zhang recognized a $45,000 gain on the sale of Section 1231 property. Over the previous…

A: Introduction:- Calculation of Zhang's 2021 gain is characterized as follows under:- First find out…

Q: In computing the personal holding company tax of Southerland in 2022, what is the amount of…

A: The question is asking for the calculation of the dividends paid deduction for Southerland…

Q: Saleh sold the following stock in 2021. ABC, Incorporated, is a § 1202 qualified small business…

A: INTRODUCTION: A stock is a type of instrument that implies the holder has proportional ownership in…

Q: On January 1, 2022, Madison contributed $100,000 cash in exchange for a 25% interest in AABC LLC.…

A: Madison contributed $100,000 in cash on January 1, 2022 in return for a 25% investment in AABC LLC,…

Q: On January 1, 2019, Audrey acquired a 30% interest in ABC, an existing LLC. In exchange for her…

A: There are many types of consideration that may be paid to the seller, including cash, Debentures,…

Q: Thora B., a taxpayer, has the following data for taxable year 2019: Capital stock issued and…

A: The appreciation in a capital asset's value at the moment of sale is known as a capital gain. All…

Q: On January 1, 2020, GALANTY Company granted XYZ, its president 20,000 share appreciation rights for…

A: Stock compensation expense is that expense that includes reward plans for employees in the form of…

Q: ABC Corporation owns 25 percent of the stock of DEF Corporation. During 2020, ABC Corporation…

A: Dividend is the sum of money paid regularly to its shareholders by the company out of its profits.…

Q: On May 10 of the current year, Rutland Corporation distributes to its shareholder Rose $22,000 in…

A: Dividends are payments made by a firm to eligible shareholders. Many companies decide against paying…

Question

Miss Wells has purchased the shares of two companies over the years. Each company has only
one class of shares. Purchases and sales of shares in the first of these companies, Memo Inc.,
are as follows:
February, 2015 purchase
November, 2016 purchase
April, 2017 purchase
October, 2017 sale
September, 2019 purchase
November, 2019 sale
60 @ $24
90 @ 28
45 @
30
(68) @
36
22 @
26
(53) @
40
Purchases and sales of shares in the second company, Demo Ltd., are as follows:
April, 2018 purchase
December, 2018 purchase
July, 2019 sale
$24
160 @
(260) @ 36
200
33
Required:
A. Determine the cost to Miss Wells of the Memo Inc. shares that are still being held on
December 31, 2019.
B. Determine the taxable capital gain resulting from the July, 2019 disposition of the Demo
Ltd. shares.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

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

Godo Subject: acounting
Please Do not Give image format and Solve all parts
You’re a 40% shareholder of ABC, Inc., an S corporation. ABC’s ordinary busi-ness income for 2019 was exactly $100,000. ABC distributed $20,000 to you in your capacity as a shareholder during 2019. On your 2019 Form 1040, you will report ___ of gross income from ABC. Why is that the correct amount plzzz ans asap.....
On the effective date of the Bravo Corporation's (the Company) S Corporation election (January 1, 2020) the Company had a built in gain with respect to certain real estate held by the Corporation on that date of $100,000. The Company had zero basis in the real estate and it was appraised for $100,000. One year later (January 1, 2021) this built in gain was realized when the Company sold the real estate to an unrelated party $100,000 and there were no expenses associated with the sale. For the Company's calendar year 2021, the Company has, exclusive of this gain, taxable income of $2,000,000. Required: 1. Calculate the built-in gains tax (Federal) that will be paid by Bravo Corporation with its 2021 tax return as a result of the sale of this real estate. 2. Calculate the amount of gain that will be passed through to the Company's shareholders related to this sale.
ABC owns 29% of XYZ Corp. During 2020, XYZ reported a net income of $415,000 and did not declare any dividends. Additionally, XYZ sold a piece of land, with a carrying value of $140,000 to ABC for $345,000. ABC still holds the land. ABC accounts for its investment in XYZ Corp using the equity method. Required: On December 31, 2022, a journal entry is required to record the impact of the above transactions. What is the net debit to the Investment in XYZ Corp account / the net credit to the Equity Income.
Sagar
C sold capital property in Year 1 for net proceeds of $200,000. The property has an adjusted cost base of $40,000. C received $120,000 at the time of the sale and a note for the balance to be paid in equal annual instalments over the following two years. What is the minimum taxable capital gain to be reported in Year 2?
On January 1, 2020, MALTEZER Company granted the president, 20,000 share appreciation rights for past services. Those rights are exercisable immediately and expire on January 1, 2023. On exercise, the grantee is entitled to receive cash for the excess of the market price on the exercise date over the market price on the grant date. The grantee did not exercise any of the rights in 2020. The market price of share was ₱30 on January 1, 2020 and ₱45 on December 31, 2020. What amount should be recognized as compensation expense for 2020?
.
the answer above is incorrect according to the exam I am taking the correct answer is $17780
17. TP had an adjusted basis in her LLC interest of $50,000 immediately before she received a current proportionate distribution of $20,000 cash, unrealized accounts receivable with a basis of 0 and a FMV of $10,000, and real property with a basis of $40,000 and a FMV of $50,000. Her basis in the distributed real property is: a. 0 b. $30,000 c. $20,000 d. $40,000 e. None of the above
Indigo Corporation owns shares of Raccoon Company that are classified as part of Indigo's trading portfolio and accounted for using the fair value through net income model. At December 31, 2021, the securities were carried in Indigo's accounting records at their cost of $418,000, which equaled their fair value. On November 1, 2022, when the securities fair value was $442,000, Indigo declared property dividend that will result in Raccoon’s securities being distributed on December 15, 2022 to the shareholders of record on December 1, 2022.Prepare the journal entries for all three dates. Date Account Titles and Explanation Debit Credit Nov. 1, 2022Dec. 1, 2022Dec. 15, 2022 (To record fair value adjustment) (To record declaration of property dividend) Nov. 1, 2022Dec. 1, 2022Dec. 15, 2022 Nov. 1, 2022Dec. 1, 2022Dec. 15, 2022