ed Fruit Corp. stock is owned one-third by Raisin and two-thirds by Prune. All ders are US resident citizen individuals. At the beginning of the current year, Raisin's his shares was $54,000 and Prune's basis in her shares was $18,000. During the ear, Dried Fruit Corp. earned $324,000 of net income from operations. Raisin's share 3,000; Prune's share was $216,000. On December 31st, Dried Fruit Corp. distributes e (real property) having a fair market value of $108,000, and a basis of $72,000, to

ed Fruit Corp. stock is owned one-third by Raisin and two-thirds by Prune. All ders are US resident citizen individuals. At the beginning of the current year, Raisin's his shares was $54,000 and Prune's basis in her shares was $18,000. During the ear, Dried Fruit Corp. earned $324,000 of net income from operations. Raisin's share 3,000; Prune's share was $216,000. On December 31st, Dried Fruit Corp. distributes e (real property) having a fair market value of $108,000, and a basis of $72,000, to

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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Moon, Inc. is a family owned corporation with an authorized capital stock of P20million, P20 par value. Seventy five percent of the authorized were subscribed and paid. May owns one half of the issued stocks. June holds an equivalent of fifty percent of what May owns; and Julie owns an equivalent to seventy five percent of what June holds; the balance to other stockholders. The board of Moon, Inc. declared an additional issuance of stock for subscription of 60% of the unissued capital stock. This will allow all stockholders to exercise their preemptive right. The subscription price is 50% above par value. Required:1. How many shares are offered for subscription? How much cash can be generated from this subscription? 2. If May, June and Julie will exercise their rights to subscribe, what is the maximum number of shares each can subscribed? How much cash maybe realized from each subscription? 3. Assuming that May, June and Julie will not exercise their preemptive rights, and their rights…
On January 1, 2023, Kinney, Inc., an S corporation, reports $33,600 of accumulated E & P and a balance of $84,000 in AAA. Kinney has two shareholders, Erin and Frank, each of whom owns 500 shares of Kinney's stock. Kinney's nonseparately stated ordinary income for the year is $42,000. Kinney distributes $50,400 to each shareholder on July 1, and it distributes another $25,200 to each shareholder on December 21. How are the shareholders taxed on the distributions? Ignore the 20% QBI deduction. Do not round intermediate computations. If required, round your final answers to the nearest dollar. Erin and Frank each report $ dividend income for the July 1 distribution and $ distribution. Assuming that the shareholders have sufficient basis in their stock, Erin and Frank each receive a tax-free distribution from AAA. $ each for the December 21
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