Jefferson Millinery Inc. (JMI) decided to liquidate its wholly owned subsidiary, 8 Miles High Inc. (8MH).8MH had the following tax accounting balance sheet: (Leave no answer blank. Enter zero if applicable.)CashBuildingLandTotalFMV$ 265,00078,000187,000$530,000AdjustedBasisS$Appreciation265,00034,500120,500420,00043,50066,500$ 110,000a. What amount of gain or loss does 8MH recognize in the complete liquidation?b. What amount of gain or loss does JMI recognize in the complete liquidation?c. What is JMI's tax basis in the building and land after the complete liquidation?

Liquidation -The closing of a company or business division is known as liquidation. To settle debts…

Answered: Jefferson Millinery Inc. (JMI) decided…

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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8 D es Required information [The following information applies to the questions displayed below.] Tiffany and Carlos decided to liquidate their jointly owned corporation, Royal Oak Furniture (ROF). After liquidating its remaining inventory and paying off its remaining liabilities, ROF had the following tax accounting balance sheet: Cash Building Land Total FMV Adjusted Tax Basis $ 200,000 $ 200,000 50,000 150,000 10,000 200,000 $ 400,000 $ 410,000 Appreciation (Depreciation) Gain or loss recognized 40,000 (50,000) $ (10,000) Under the terms of the agreement, Tiffany will receive the $200,000 cash in exchange for her 50 percent interest in ROF. Tiffany's tax basis in her ROF stock is $50,000. Carlos will receive the building and land in exchange for his 50 percent interest in ROF. His tax basis in the ROF stock is $100,000. Assume for purposes of this problem that the cash available to distribute to the shareholders has been reduced by any tax paid by the corporation on gain recognized…
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7
Required information. Problem 19-63 (LO 19-5) (Algo) [The following information applies to the questions displayed below] Tiffany and Carlos decided to liquidate their jointly owned corporation, Royal Oak Furniture (ROF) After liquidating its remaining inventory and paying off its remaining liabilities, ROF had the following tax accounting balance sheet Adjusted Tax Basis $ 205,500 14,500 205,000 $425,000 Cash Building Land Total FMV $ 205,500 66,500 139,000 $ 411,000 Appreciation (Depreciation) Gain or loss recognized 52,000 (66,000) $ (14,000) Under the terms of the agreement, Tiffany will receive the $205,500 cash in exchange for her 50 percent interest in ROF Tiffany's tax basis in her ROF stock is $55,000. Carlos will receive the building and land in exchange for his 50 percent interest in ROF His tax basis in the ROF stock is $103,000 Assume for purposes of this problem that the cash available to distribute to the shareholders has been reduced by any tax paid by the corporation…
jagdish
On June 30, Pronghorn Corp discontinued its operations in Mexico. During the year, the operating income was $270,000 before taxes. On September 1, Pronghorn disposed of the Mexico facility at a pretax loss of $670,000. The applicable tax rate is 30%. Show the discontinued operations section of Pronghorn’s income statement. PRONGHORN CORPPartial Income Statement select an opening section name enter an income statement item $enter a dollar amount enter an income statement item $enter a dollar amount $enter a total dollar amount
Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions Incorporated (WFI). After liquidating its remaining inventory and paying off its remaining liabilities, WFI had the following tax accounting balance sheet: Adjusted FMV Таx Basis Appreciation $ 165,000 33,000 $ 165,000 16,500 Cash Building 16,500 132,000 66,000 $ 247,500 Land 66,000 $ 330,000 $ 82,500 Total Under the terms of the agreement, Shauna will receive the $165,000 cash in exchange for her 50 percent interest in WFI. Shauna's tax basis in her WFI stock is $41,250. Danielle will receive the building and land in exchange for her 50 percent interest in WFI. Danielle's tax basis in her WFI stock is $82,500. Assume for purposes of this problem that the cash available to distribute to the shareholders has been reduced by any tax paid by the corporation on gain recognized as a result of the liquidation. (Negative amounts should be indicated by a minus sign.) c. What amount of gain or loss does…
(J)
None
6. Scott Corp. received cash of P20,000 that was included in revenues in its 20x4 financial statements, of which P12,000 will not be taxable until 20x5. Scott's enacted tax rate is 30% fo 20x4, and 25% for 20x5. What amount should Scott report in its 20x4 balance sheet for deferred income tax liability? d. 3,600 b. 2,400 с. 3,000 a. 2,000 (AICPA)

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