Bob and Bill form Star Corporation with the followinginvestments. Bob transfers machinery (basis of $36,000and fair market value of $74,000) and Bill transfers land(basis of $19,000 and fair market value of $52,000) andservices rendered (worth $22,000) in organizing thecorporation. Each is issued 25 shares in Star Corporation.With respect to the transfers:Bill has a basis of $41,000 in the 25 shares he acquires in Star Corporation.Star Corporation has a basis of $41,000 in the land transferred by Bill.Bob has no recognized gain; Bill recognizes income/gain of $55,000.Neither Bob nor Bill has recognized gain or income on the transfers.None of these.

Corporations are formed by contribution of the owners and contribution may be in the form of land,…

Bob and Bill form Star Corporation with the follow investments. Bob transfers machinery (basis of $36 and fair market value of $74,000) and Bill transfers (basis of $19,000 and fair market value of $52,000) services rendered (worth $22,000) in organizing th corporation. Each is issued 25 shares in Star Corpo With respect to the transfers:

Bob and Bill form Star Corporation with the follow investments. Bob transfers machinery (basis of $36 and fair market value of $74,000) and Bill transfers (basis of $19,000 and fair market value of $52,000) services rendered (worth $22,000) in organizing th corporation. Each is issued 25 shares in Star Corpo With respect to the transfers:

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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Question. 15
Matthew and Hein sell to Melges a 1/3 interest in the Matthew - Hein partnership. Melges will pay Matthew and Hein each $141400 for admission into the organization. Before this transaction, Matthew and Hein show capital balances of $209000 each. The journal entry to record the admission of Melges will O show a credit to Melges, Capital for $282800. O show a debit to Hein, Capital for $141400. show a debit to Cash for $282800. O not show a debit to Cash.
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Elaine, James, and Jeremy form Forest Corporation by transferring the following items to the corporation: Items transferred Basis Fair Market Value Number of Shares Issued From Elaine: Cash $60,000 $60,000 200 shares Equipment 30,000 340,000 From James: Land 100,000 540,000 200 shares Mortgage 140,000 140,000 From Jeremy: Office equipment 50,000 260,000* 100 shares Besides the receiving 100 shares of stock,…
Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the following assets: Basis Fair Market Value Kevan: Cash $15,000 $15,000 Land* 120,000 440,000 Totals $135,000 $455,000 *Nonrecourse debt secured by the land equals $210,000 Each member received a 33.33 percent capital and profits interest in the LLC. (Leave no answer blank. Enter zero if applicable. Do not round intermediate calculations.) f. If the lender holding the nonrecourse debt secured by Kevan’s land required Kevan to guarantee 33.33 percent of the debt and Jerry to guarantee the remaining 66.67 percent of the debt when Albee LLC was formed, how much gain or loss will Kevan recognize? Gain or loss recognized
Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the following assets: Basis Fair Market Value Kevan: Cash $15,000 $15,000 Land* 120,000 440,000 Totals $135,000 $455,000 *Nonrecourse debt secured by the land equals $210,000 Each member received a 33.33 percent capital and profits interest in the LLC. (Leave no answer blank. Enter zero if applicable. Do not round intermediate calculations.) b. What is Kevan’s tax basis in his LLC interest? Jerry Dave Kevan Gain or loss recognized
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Chris invests land and building worth $100k and $400k. Crown invests cash and inventory at $70k and $30k. They agree to have equal shares. How would you record it under the goodwill and bonus method?
William and Ardi's capital balances are $12.000 and $8,000, respectively. The partnership firm owes wheeler $3,000 on a note. Profit is divided equally. On liquidation, $4,000 in cash is available for distribution to the two partners. How should this cash be distributed to them?
Beau Dawson and Willow McDonald formed a partnership, investing $67,500 and $202,500, respectively. Determine their participation in the year's net income of $285,000 under each of the following independent assumptions: c. Interest at the rate of 6% allowed on original investments and the remainder divided in the ratio of 2:3.
Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $108,000 and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $72,000 and was appraised at $180,000. The land was also encumbered with a $72,000 nonrecourse mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of the first year, Blue Bell made a $6,300 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information: Sales revenue $ 470,000 Cost of goods sold 450,000 Operating expenses 55,000 Long-term capital gains 2,100 §1231 gains 900 Charitable contributions 300 Municipal bond interest 300 Salary paid as a guaranteed payment to Deanne (not included in expenses) 3,000 a. Compute the adjusted basis of each partner’s interest in the partnership…