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Barbara DeMarco CPA

Barbara DeMarco CPA

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Barbara DeMarco, CPA operates a lucrative return preparation business as a sole proprietorship focusing on all types of individuals and businesses. Her friend Roberta Heckleman, CPA operates as a sole proprietorship too. Barbara and Roberta decide to merge their businesses and operate under the name DeMarco and Hecklleman, CPAS as a partnership. Barbara contributes her client list with an FMV of $80,000 and a basis of $80,000 and her land with an FMV of $250,000 and a basis of $75,000. There are no liabilities associated with the land. Roberta contributes her tax law library with an FMV of $75,000 and a basis of $95,000 and $255,000 cash. How much gain must DeMarco and Heckleman, CPAs recognize on the transfer of these assets from Barbara and Roberta? (a)$0 (b)$10,000 (c) $170,000 (d)$255,000
Transcribed Image Text:Barbara DeMarco, CPA operates a lucrative return preparation business as a sole proprietorship focusing on all types of individuals and businesses. Her friend Roberta Heckleman, CPA operates as a sole proprietorship too. Barbara and Roberta decide to merge their businesses and operate under the name DeMarco and Hecklleman, CPAS as a partnership. Barbara contributes her client list with an FMV of $80,000 and a basis of $80,000 and her land with an FMV of $250,000 and a basis of $75,000. There are no liabilities associated with the land. Roberta contributes her tax law library with an FMV of $75,000 and a basis of $95,000 and $255,000 cash. How much gain must DeMarco and Heckleman, CPAs recognize on the transfer of these assets from Barbara and Roberta? (a)$0 (b)$10,000 (c) $170,000 (d)$255,000
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