For Georgie:c. Will Georgie recognize income/gain/loss?d. What is Georgie's basis in his 50 shares of AGRA stock? Amber, Georgie, Ross, and Aaron have decide to combine their resources to form AGRA, Inc., a C-corporation. Theshareholders contribute the following assets in exchange for stock in AGRANo. of sharesAdjustedBasisFair MarketValueIssuedAmber:• Cash• Unrealized accounts receivable$ 50,000150 shares$0100,000Georgie:• Georgie is a computer engineer who receivedstock in exchange for services provided$50,00050 sharesRoss• Land and Building80,000(100,000)500,000(100,000)Mortgage400 sharesAaron• Manufacturing equipment• In addition to stock, Aaron also received$50,000 in cash120,000750,000700 shares

Answered: For Georgie: c. Will Georgie…

Business

Accounting

For Georgie: c. Will Georgie recognize income/gain/loss? d. What is Georgie's basis in his 50 shares of AGRA stock?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Finance Which of the following companies would help to administer your will? a. RBC Capital Markets…

A: Trust are created which will help people to create will and administer the will after the death of…

Q: where is the 24100 for gail sabatini capital coming from

A: A Journal entry is a primary entry that records the financial transactions initially. The…

Q: Mr. Amit owns a flat. On 5-4-2020, he decides and starts a business of dealing in sale and purchse…

A: As per section 45 (2) of the income tax act 1961 when the Capital Asset is converted into Stock the…

Q: How much was the bonus debited or credited in partner Bruce’s capital account? *

A: Under the bonus method for the admission of a partner into a partnership firm, the investment made…

Q: Vanessa bought shares in Daugh Mutual Fund in 2018 for $120 a share. In 2019, she received a…

A: Vanessa bought shares in Dough mutual fund in 2018 for $120. Time to time she receives non-dividend…

Q: On October 30, 2015, Tess bought 500 shares of ACTS stock for 640 pesos per share. On November 15,…

A: The gain or loss on the investment can be computed by finding the difference between sales price…

Q: Under the equity method, the investor

A: Investment shows the amount provided in a project or securities with the expectation of something in…

Q: Which of the following is not part of decedent’s interest for estate tax purposes?

A: Estate tax is levied when the assets of the person till the time of his death is transmitted to the…

Q: Issac and Karl are partners. Issac has a capital balance of $25,000 and Karl has a capital balance…

A: Assets are the resources which are controlled or owned by the entity and it is expected that the…

Q: In the ABC partnership (to which D seeks admittance), the capital balances of A, B, and C, who share…

A: Existing partners = A, B and C ABC profit sharing ratio = 5:3:2 Admission of New partner = D…

Q: P and Q are sharing profit and losses equally .With effects from current year they decided to share…

A: We have the following information: P and Q are sharing profit and losses equally With effects from…

Q: Ann and Paul are shareholders of Android Corporation. Each has a stock basis of $10,000. Android has…

A: Introduction: Earnings and profits indicate a company's ability to pay dividends. Any sum paid by an…

Q: What is Jenna’s basis in TOBY, INC. stock? Does Ollie have income, gain , or loss on the…

A: The basis of anything for tax purposes is the worth of the asset that will be recorded for tax…

Q: Sally purchased a share of stock for $78.00. During the year she received a dividend of $3.11. At…

A: The formula to compute holding period return as follows: Holding period return=Income+(End of period…

Q: Our topic is about partnership dissolution.What is the total capital balance after retirement of…

A: Retirement of the partner is the process where the partner takes out his share from the partnership…

Q: Target Corporation holds assets with a fair market value of $4,000,000 (adjusted basis of…

A: It is the change in material amount of the assets or securities recorded at their initial cost. The…

Q: Peter purchases 100 shares of ABC stock for $10,000 on April 20th, and another 100 shares of ABC…

A: Stock basis refers to the amount invested in purchasing the stocks, be it the actual cash paid at…

Q: In what way is your home an investment? Long-term equity growth in your home is a component of…

A: Homeownership has long been a part of everyone's dream. As a result, many people believe that having…

Q: Aminah owns 1,000 shares of a firm that has just announced an increase in its dividend from $2.00 to…

A: Home made dividend When dividend policy can be manipulated by the shareholders to suit their…

Q: Margo bought stock for $1,500 plus a $25 commission; 18 months later she sold all the stock for…

A: Form 1099-B will also indicate the date the stock was sold. The purchase and sell dates will…

Q: ason purchased 300 shares of the hodge and mattox energy fund. Each share cost 15.15. Fifteen months…

A: The company issues its equity shares to the public to raise capital and the shareholders would be…

Q: anne received stock and boot in a transfer that qualfied under code Sec 351. she has a realized gain…

A: Section 351 allows the incorporation transfer which is tax free when some requirements are met,…

Q: All questions are mandatory Quran (10) Which of the following combinations of personal assets would…

Q: AS-Ibri. He

A: Limited partnernership : Limited Partnernership is a king of partnership where the liability of the…

Q: Reggie owned stock in a corporation that has a dividend reinvestment plan. Reggie chose to…

A: Under dividend reinvestment plan if we buy more stocks at a price which is lesser than its Fair…

Q: his common stocks will pay 2) Ravi has a diversified portfolio. His bonds will pay his preferred…

A: Diversified Portfolio refers to the combinations of various assets acquired by single investor to…

Q: Using data in 1 and 3, how much is the capital balance of Elizabeth after the retirement of Hugo?…

A: Retirement of a partner could be defined as the removal of a member from the partnership with the…

Q: A decedent died on November 2, 2022 leaving the following properties Common stocks of Sunshine…

A: This Question is related to estate taxation and the computation of the gross estate of a decedent.…

Q: d. Using the operating results, what are Slicenhook's ordinary income and separately stated items…

A: Solution:-The inquiry involves establishing the typical earnings of the Slicenhook Partnership and…

Q: 1 Nemji purchased one share of Stock A for $500. Three years later, Nemji exchanged the share of…

A: When an asset is sold after holding it for a period of more than a year then the…

Q: Asset Levels. Ryan and Nicole have the following assets: What is the value of their liquid assets?…

A: Liquid assets are those that can be quickly converted into cash without significant loss in value.…

Q: bt balance is uncollectible, the share of A in the P28,000

A: The meaning of partnership business is two or more persons bringing the capital to form the business…

Q: Question 26 Which of the following transactions increases retained earnings? O A property dividend.…

A: 1. Retained Earnings - Retained earnings are the portion of profit which is remained after the…

Q: jacques purchased x shares of a corporation that pays a y dollar annual dividend. what is his annual…

A: Annual dividend income is calculated using following equation Annual dividend income = Number of…

Q: Yasmeen purchases stock on January 30,2018 . If she wishes to achieve a long-term holding period,…

A: Holding period: A holding period is the amount of time the investment is held by an investor or the…

Q: Analyse the different capacities of Mudarib as Trustee, Partner ,Liable, Employee.

A: Mudarabah is basically a silent partnership agreement made up of cash and the labor. It is possible…

Q: Assume Lisa sells her property at the end of year 3. Her ATER= $204,835. She wants to own a…

A: ATER = $204,835Share price=$368.22

Q: 8. popular investments to present to couples who have recently are become parents.

A: Investing is an essential part of wealth-creation, which helps you beat inflation to fulfill your…

Q: Under the equity method, the investor must debit the Equity Investments account when a dividend is…

A: Equity method is used by the investor company when the percentage of investment in the common stock…

Q: How can one become millionaire using the power of compounding?

A: Compounding is a phenomenon which shows that interest is compounded on money invested as well as the…

Question

For Georgie:

c. Will Georgie recognize income/gain/loss?

d. What is Georgie's basis in his 50 shares of AGRA stock?

Amber, Georgie, Ross, and Aaron have decide to combine their resources to form AGRA, Inc., a C-corporation. The
shareholders contribute the following assets in exchange for stock in AGRA
No. of shares
Adjusted
Basis
Fair Market
Value
Issued
Amber:
• Cash
• Unrealized accounts receivable
$ 50,000
150 shares
$0
100,000
Georgie:
• Georgie is a computer engineer who received
stock in exchange for services provided
$50,000
50 shares
Ross
• Land and Building
80,000
(100,000)
500,000
(100,000)
Mortgage
400 shares
Aaron
• Manufacturing equipment
• In addition to stock, Aaron also received
$50,000 in cash
120,000
750,000
700 shares

Expert Solution

Step 1

Issuance of Stock in Exchange for a service

Taxable transaction at FMV of stock

Wages Expense for corporation
Ordinary income for the shareholder providing the service(since stock is treated as compensation for services)

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Marilyn owns 100% of the stock of Lilac, Inc., with an adjusted basis of $45,000. She receives a cash distribution of $160,000 from Lilac when its earnings and profits are $90,000. A. What is Marilyn’s dividend income? B. What is Marilyn’s recognized gain or loss? c. What is Marilyn’s adjusted basis for her stock after the distribution?
which one is correct answer please confirm? QUESTION 19 Several regulations limit dividend payments. Which of the following do not limit dividend payments? a. Liability restriction b. Capital impairment restriction c. Restrictive covenants d. Net earnings restriction
William owns 200 shares of Data General stock. He purchased the stock for $20 a share. He sold her stock for $25 a share. The commissions required to buy and sell his stock totaled $130. Assuming that He received no dividends during the time she owned the stock, what is his total return for this transaction?
Complete this question by entering your answers in the tabs below. Required A Required B For how much money must the other assets be sold so that each partner receives some amount of cash in a liquidation? Other assets must be sold
Frank has 200 shares of XYZ, Inc. with a basis of $5,000 and a value of 7,500. He receives a tax-free stock dividend of 50 additional shares, worth $2,500. (a) After the stock dividend, what is his per share basis in the stock? In other words, if he sells 1 share of stock, what is the basis in that share for determining the gain on the sale of the share? (b) Suppose it was a tax-free dividend, but the 50 new shares were of preferred stock – what would his basis be in common stock and in the preferred stock?
(a) Reproduce and complete the following controlling and non-controlling interest table. Show your calculations. ( (b) What percentage of the voting in Son 7 Ltd will be controlled by the Daddy Ltd? (c) What percentage of the dividend declared by Son 7 Ltd will be received by the Daddy Ltd?
Madhu, Neha and Tina are partners sharing profits in the ratio of 5:3:2. Calculate:new profit sharing ratio and gaining ratio if1. Madhu retires2. Neha retires3. Tina retires.
V1.
1. Dar and Ling share in the partnership’s profit in the ratio of 2:1, respectively. Darreceived P245,000 as his share. How much did Ling receive as her share?
Kelley wants to purchase shares in Classic Kars, Inc., but is torn between buying shares of common stock or shares of preferred stock. What should he consider before determining the type of share he should purchase?
Answer the following question showing all calculations.
Jane Ramos owned stock with a cost of $200,000. The stock has a market value on Jane's date of death of $375,000. The stock was willed to Jane's niece Jenny. Which of the following is true? a. Jenny's basis is $200,000; the stock's value in the gross estate is $100,000. b. Jenny's basis is $375,000; the stock's value in the gross estate is $100,000. c. Jenny's basis is $200,000; the stock's value in the gross estate is $375,000. d. Jenny's basis is $375,000; the stock's value in the gross estate is $375,000.