What is James’ basis in his Forest Corporation stock? Elaine, James, and Jeremy form Forest Corporation by transferring assets to the corporation. The table below outlines the items transferred, including the basis, fair market value, and number of shares issued:**Items Transferred**| Issued | Basis | Fair Market Value | Number of Shares ||-------------|---------|-------------------|------------------|| **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 |Additionally, besides receiving 100 shares of stock, Jeremy also received $60,000 in cash. Forest Corporation assumed the mortgage transferred by James. ---*Note: The asterisk (*) refers to the fair market value of the office equipment transferred by Jeremy.

A stock (sometimes called equity) is a financial instrument that reflects ownership of a portion of…

Answered: d Jeremy form Forest Corporation by…

d Jeremy form Forest Corporation by transferring the following item Items transferred Basis Fair Market Value Number of S

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

What is James’ basis in his Forest Corporation stock?

Elaine, James, and Jeremy form Forest Corporation by transferring assets to the corporation. The table below outlines the items transferred, including the basis, fair market value, and number of shares issued:

**Items Transferred**

| Issued | Basis | Fair Market Value | Number of Shares |
|-------------|---------|-------------------|------------------|
| **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 |

Additionally, besides receiving 100 shares of stock, Jeremy also received $60,000 in cash. Forest Corporation assumed the mortgage transferred by James.

---

*Note: The asterisk (*) refers to the fair market value of the office equipment transferred by Jeremy.

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