Exercise 20-23 (Algorithmic) (LO. 3) Rebecca holds 100 shares of Gotchas stock that she purchased for $4,900 several years ago. In a merger of Gotchas into Solis, Inc., Rebecca exchanges her 100 Gotchas shares for 1,000 Solis shares and $980. Gotchas is valued at $107.80 per share and Solis at $9.80 p share. a. What is Rebecca's realized and recognized gain/loss from the reorganization? The exchange of Rebecca's stock has no b. What is Rebecca's basis in her Solis stock? 0 X ✔ income tax consequences for Gotchas or Solis.

Exercise 20-23 (Algorithmic) (LO. 3) Rebecca holds 100 shares of Gotchas stock that she purchased for $4,900 several years ago. In a merger of Gotchas into Solis, Inc., Rebecca exchanges her 100 Gotchas shares for 1,000 Solis shares and $980. Gotchas is valued at $107.80 per share and Solis at $9.80 p share. a. What is Rebecca's realized and recognized gain/loss from the reorganization? The exchange of Rebecca's stock has no b. What is Rebecca's basis in her Solis stock? 0 X ✔ income tax consequences for Gotchas or Solis.

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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Exercise 20-23 (Algorithmic) (LO. 3) Rebecca holds 100 shares of Gotchas stock that she purchased for $1,100 several years ago. In a merger of Gotchas into Solis, Inc., Rebecca exchanges her 100 Gotchas shares for 1,000 Solis shares and $220. Gotchas is valued at $24.20 per share and Solis at $2.20 per share. a. What is Rebecca's realized and recognized gain/loss from the reorganization? The exchange of Rebecca's stock b. What is Rebecca's basis in her Solis stock? income tax consequences for Gotchas or Solis.
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Defee tar 28. Lindsay and Malcolm form Yellow Corporation. Lindsay transfers equipment worth $950,000 (basis of $200,000) and cash of $50,000 to Yellow Corporation for 50% of its stock, Malcolm transfers a building and land worth $1,050,000 (basis of $400,000) for 50% of Yellow's stock and $50,000 in cash. a. Lindsay recognizes no gain; Malcolm recognizes gain of $50,000. b. Lindsay recognizes a gain of $50,000; Malcolm has no gain. c. Neither Lindsay nor Malcolm recognizes gain.
Exercise 19-30 (Algorithmic) (LO. 8) During the current year, Gnatcatcher, Inc., (E & P of $1,300,000) distributed $575,000 each to Brandi and Yuen in redemption of some of their Gnatcatcher stock. The two shareholders acquired their shares five years ago. Each shareholder is in the 32% tax bracket, and each had a $143,750 basis in the redeemed stock. Assume taxpayers in the 32% tax bracket are subject to the long-term capital gains and qualified dividends tax rate of 15%. If required, round your answers to nearest dollar. a. Assume that the distribution to Brandi is a qualifying stock redemption. The distribution is taxed as a sale or exchange Feedback Check My Work and Brandi's tax liability is $ b. Assume that the distribution to Yuen is a nonqualified stock redemption. The distribution is taxed a dividend and Yuen's tax liability is $
Exercise 5-16 (Algorithmic) (LO. 3) On January 1 of the current year, Rhondell Corporation has accumulated E & P of $114,000. Current E & P for the year is $342,000, earned evenly throughout the year. Elizabeth and Jonathan are sole equal shareholders of Rhondell from January 1 to April 30. On May 1, Elizabeth sells all of her stock to Marshall. Rhondell makes two distributions to shareholders during the year: a total of $182,400 ($91,200 to Elizabeth and $91,200 to Jonathan) on April 30 and a total of $319,200 ($159,600 to Jonathan and $159,600 Marshall) on December 31. Determine the allocation of the distributions by completing the table below. Assume that the shareholders have sufficient basis in their stock for any amount that is treated as return of capital. If an amount is zero, enter "0". If required, round any division to two decimal places and use in subsequent computations. Round final answers to the nearest dollar. April 30 distribution of $182,400 From Current E & P From…
ff More info a. Purchased 440 shares of Jefferson Fine Foods common stock at $31 per share (less than 10% of Jefferson's outstanding stock), with the intent of holding the stock for the indefinite future. b. Received a cash dividend of $1.70 per share on the Jefferson investment. c. At year-end, adjusted the investment account to fair value of $36 per share. d. Sold the Jefferson stock for $26 per share.
34. Firm B's one million shares of stock currently sell for $20 each. Firm A estimates the economic gain from the merger to be $10 million and is prepared to offer $22 cash for each share of B. What percentage of the merger gain will be captured by firm B's shareholders?A. 20.00%B. 33.33%C. 50.00%D. 60.00%
Show your work Cerulean Corporation has two equal shareholders, Marco and Avery. Marco acquired his Cerulean stock three years ago by transferring property worth $700,000, basis of $300,000, for 70 shares of the stock. Avery acquired 70 shares in Cerulean Corporation two years ago by transferring property worth $660,000, basis of $110,000. Cerulean Corporation’s accumulated E & P as of January 1 of the current year is $350,000. On March 1 of the current year, the corporation distributed to Marco property worth $120,000, basis to Cerulean of $50,000. It distributed cash of $220,000 to Avery. On July 1 of the current year, Avery sold her stock to Harpreet for $820,000. On December 1 of the current year, Cerulean distributed cash of $90,000 each to Harpreet and Marco. What are the tax issues?
0 Required information [The following information applies to the questions displayed below.] a. On March 22, purchased 700 shares of RPI Company stock at $22 per share. Duke's stock investment results in it having an insignificant influence over RPI. b. On July 1, received a $2 per share cash dividend on the RPI stock purchased in part a. c. On October 8, sold 350 shares of RPI stock for $32 per share. Analyze each transaction above by showing its effects on the accounting equation-specifically, identify the accounts and amounts (including+ or -) for each transaction. k Assets Liabilities + a. 8 CO M I K ( 9 ; I option { [ ? I Equity + 11 "1 C } ] Save & Ext Check delete
Exercise 18-23 (Algorithmic) (LO. 1, 2) Yvonne and Simon form Ion Corporation. Yvonne transfers equipment with a basis of $377,600 and fair market value of $566,400 to Ion Corporation. Simon invests $453,120 of cash. They each receive 100 shares in Ion Corporation worth $453,120, but Yvonne also receives $113,280 in cash from Ion. Calculate Ion Corporation's basis in the equipment and determine Yvonne and Simon's basis in the Ion stock. Ion Corporation has a basis of $ basis of $ for his stock. in the equipment. Yvonne has a basis of $ for her stock and Simon has a
Exercise 7-21 (Algorithmic) (LO. 2) On May 9, 2018, Calvin acquired 600 shares of stock in Hobbes Corporation, a new startup company, for $103,300. Calvin acquired the stock directly from Hobbes, and it is classified as § 1244 stock (at the time Calvin acquired his stock, the corporation had $900,000 of paid- in capital). On January 15, 2020, Calvin sold all of his Hobbes stock for $10,330. Assume that Calvin is single. Assuming that Calvin is single, determine his tax consequences as a result of this sale. If an amount is zero, enter "0". As a result of the sale, Calvin has: Ordinary loss: Short-term capital loss: Long-term capital loss: DO
Problem 19-29 (Algorithmic) (LO. 3) At her death, Chow owned 55% of the stock in Finch Corporation, with the balance held by family members. In the past five years, Finch has earned average net profits of $1,920,000, and on the date of Chow's death, the book value of its stock is $4,800,000. An appropriate rate of return for Finch's business is in is 5.45%. If required, round your intermediate computations to the nearest dollar. a. If goodwill exists, the total value of Finch stock is $ 3,819,358 X. What value would the IRS argue that the stock Chow owned should be included in her estate? $ 381,935 X