Darrel exchanged his stocks in Queen Corporation for the stocks of Queendom Corporation pursuant to a plan of merger between Queen and Queendom. Darrel acquired his stocks for P100,000 when its fair value was P105,000. The shares of Queen and Queendom have fair values of P120,000, and P110,000, respectively on the date of exchange. What is the tax basis of the Queendom shares received and the gain to be recognized in the exchange? 000 JEN 4 a. P120,000; P20,000 c. P105,000; P O b. P 110,000; P20,000 d. P100,000; P Oslab s jon

Darrel exchanged his stocks in Queen Corporation for the stocks of Queendom Corporation pursuant to a plan of merger between Queen and Queendom. Darrel acquired his stocks for P100,000 when its fair value was P105,000. The shares of Queen and Queendom have fair values of P120,000, and P110,000, respectively on the date of exchange. What is the tax basis of the Queendom shares received and the gain to be recognized in the exchange? 000 JEN 4 a. P120,000; P20,000 c. P105,000; P O b. P 110,000; P20,000 d. P100,000; P Oslab s jon

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter18: Corporations: Organization And Capital Structure

Section: Chapter Questions

Problem 4BCRQ

See similar textbooks

Similar questions

2. M acquires H Company on 01/01/15. To obtain the net assets, M pays $200.000 in cash and issues 10.000 shares of its own $10 par value common stock. On this date, M's stock has a fair market value of $18 per share. The book values for both M and H as of 31/12/14, follow. The fair market value of each of H's accounts is also included. In addition H holds fully amortized patent that still retains a $30.000 value. H Company M Inc Fair Market Book Value Book Value Value Cash $ 300.000 $ 40.000 $ 40.000 Receivables 160.000 220.000 100.000 90.000 80.000 Inventory 130.000 130.000 Land 60.000 60.000 Buildings (net) Equipment (net) Accounts Payable Long-Term Liabilities 400.000 110.000 140.000 120.000 50.000 50.000 160.000 30.000 30.000 380.000 170.000 150.000 Common Stock 400.000 40.000 Retained Earnings 360.000 240.000 Required: Assume that this combination is a statutory merger so that H's accounts transferred to the records of M with H subsequently being dissolved corporation. Prepare the…
7. On September 30, 2021, Remus, Semus and Tuss agreed on a joint venture to sell their common stock shares of the Sagittarius Mines. Gains and losses are to be shared in proportion to the contributed shares. Gains and losses are to be shared in proportion to the contributed shares. Remus contributes 6,000 shares, which had cost him P42 a share. Semus gave 10,000 shares which had a cost of P58 each and Tuss 4,000 shares which had a cost of P62 per share. The par value of the shares was P50 and when the venture began market value was P40 per share. On October 20 he sold 4,500 shares for P44 a share and P3,000 expenses incurred. On November 1, Sagittarius Mines distributed a stock dividend of 20%. Tuss sold 5,000 shares, ex-right dividend, on November 5, for P25 a share. On November 15, Sagittarius mines paid a cash dividend of P1 per share. On November 22 he sold 6,000 shares for P28. On December 220, the remainder of the shares were sold for P35 per share. Tuss' expenses were P4,700.…
Item No. 6 is based on the following information: 091 of the Ismuoler 8 san9qx3 noitesinsano 1 000,SI 9 Kiss Company received a building in exchange for the company's 6,000 ordinary shares with a par value of P 1,000 per share. On the date of exchange, the carrying amount of the building was P 3,850,000 while its fair value was 1 P 6,400,000. The shares were trading in the stock exchange at P 1,100 per share. 000,A I 6. What would be the effect of the foregoing transaction on the total share premium? 900 PLS a. P 400,000 increase. muims19 s c. P 6,000,000 increase. d. P 6,400,000 increase. b. P 600,000 decrease.
On 8 August 20x3, alpha Ltd acquired 20000 shares in Beta Ltd (Beta) that gave alpha control over Beta in return for 10000 of its own shares. at that date, Alpha's Shares had a market value of $2.70 each, while Beta's Share had a market value of $1.30 each. Fees paid to legal advisers for the transaction totalled $2000. What is the fair value of the consideration transferred?
8) On July 1, 2022, Chester Aguilar acquires 1,000 shares of a foreign company at 10 Foreign Currency units (FC, hereafter) per share. He acquired the funds for this purchase when FC1- $1.48, a value that did not change prior to the date on which he purchased the shares. He sells the 1,000 shares December 1, 2022 for FC12 per share. On this date the exchange rate is FC1- $1.46. What is the effect of the sale transaction on Chester's net income for 20227 A) $2,520 B) $2,720 C) $1,360 D) $1,160
On 8 August 20X3, Alpha Ltd (Alpha) acquired 20 000 shares in Beta Ltd (Beta) that gave Alpha control over Beta in return for 10 000 of its own shares. At that date, Alpha’s shares had a market value of $2.70 each, while Beta’s shares had a market value of $1.30 each. Fees paid to legal advisers for the transaction totalled $2000. What is the fair value of the consideration transferred? a. $29 000 b. $26 000 c. $28 000 d. $27 000
25 Petron Company issued 5 shares in exchange for each ordinary share of Shell Company (all outstanding shares) on January 2, 2022. The fair value of Petron's shares on that date was P60 while the fair value of Shell's shares was P200. The statement of financial position of both companies before the combination were (see image below). On the same date, the fair value of Petran's identifiable assets and liabilities assumed was P5,800 and P2,100 respectively while the fair value of Shell's net assets was the same as the carrying value. How much is the amount of consideration? A Petron Shell Assets 5,500 11,500 11,500 Total 5,500 Liabilities 2,100 900 5,100 Share Capital - 100 shares Share Capital –- 60 shares Retained Earnings 1,800 4,600 11,500 2,500 Total 5,500
On 1 October 2020, OXIOM purchased 200,000 equity share in Eban, a key supplier. Eban’s shares are listed on the Ghana Stock Exchange (GSE). This share purchase did not five OXIOM control or significant influence over Eban but OXIOM intends to retain the shares in Eban as a long-term strategic investment and has elected irrevocable to measure and recognize gains and losses through other comprehensive income OXIOM paid GH₵2.40 per share for these shares being their fair value at the date of purchase. Additionally, brokers charge a fee of 2% of the amounts paid to buy the shares. On 31 March 2021, Eban paid a dividend of 25 pesewas per share On 30 September 2021, information received from GSE regarding Eban’s share price indicates the fair value of the share at GH₵2.90 Required. Explain with calculations how OXIOM should account for the transactions for the year to 30 September, 2021.
111. On June 30, 20X1, ABC Corp exchanged 6,000 shares of XYZ Company P10 par value ordinary shares for patent owned by McKing. The XYZ shares was acquired in 20X1 at a cost of P160,000. At the exchange rate XYZ shares had a fair value of P45 per share, and the patent had a carrying amount of P320,000 in McKing's books. ABC Corp should record the patent at: 320,000 270,000 180,000 160,000
5. In 2020, the entity purchased the following equity securities for the purpose of selling them in the near term. 12/31/2021 P1,920,000 Fair Values 6/30/2022 P1,800,000 Cost P2,000,000 On June 30, 2022, the entity transferred its investment to financial assets at FVTOCI because of a rare circumstance (arising from a single event that is unusual and highly unlikely to recur in the near term). 12/31/2022 P1,720,000 What amount should the entity report as unrealized loss in its 2022 profit or loss? a. P200,000 b.P120,000 c. P80,000 d.PO
B. On 14 July 2020 Comby Bhd. and Diandra Bhd each acquired 30 per cent of the ordinary shares that carry voting rights at a general meeting of shareholders of Zuka Bhd for RM100,000.00 The purchase price is equal to the fair value of 30 per cent of Zuka's identifiable assets less 30 per cent of its identifiable liabilities. Comby Bhd. and Diandra Bhd immediately agreed to share control over Zuka Bhd. For the year ended 30 June 2020 Zyka's 1scognised a loss of RM600,000.00. Comby Bhd. and Diandra Bhd. have no constructive or legal obligation in respect of their jointly controlled entity's loss and have made no payments on its behalf. Zuka Bhd recoguised profit for the year ended 30 June 2021 of RM800,000.00 There is no published price quotation for Zuka Bhd. REQUIRED: Calculate the investment for Comnby Bhd. and Diandra Bhd. using equity method for the year 2020 and 2021.
Q2. Sky Ltd acquired all the issued shares of Jupiter Ltd on 1 January 2019. The following transactions occurred between the two entities: On 1 June 2020, Sky Ltd sold inventory to Jupiter Ltd for $12 000; By 30 June 2020, Jupiter Ltd had sold 20% of this inventory to other entities for $3000. The other 80% was all sold to external entities by 30 June 2021 for $13 000. During the 2020–21 period, Jupiter Ltd sold inventory to Sky Ltd for $6000 at cost plus 20% markup. Of this inventory, 20% remained on hand in Sky Ltd at 30 June 2021. The tax rate is 30%. Required: A).Prepare the consolidation worksheet entries for Sky Ltd at 30 June 2021 concerning the intragroup inventory transfers. B).Compute the cost of goods sold to be reported in the consolidated income statement for 2021 relating to this intra-group sale.