Mary Henderson invested $45,000 cash in the company in exchange for its common stock.
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Mary Henderson invested $45,000 cash in the company in exchange for its common stock.
Common Stock -
Common Stock is the shares issued to the public in exchange of Cash. This denotes initial investment raised by the company. This should be recorded in the Stockholder's Equity.
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- Adams, by fraudulent representations, induced Barton to purchase one hundred shares of the capital stock of the Evermore Oil Company. The shares were worthless. Barton executed and delivered to Adams a negotiable promissory note for $5,000, dated May 5, in full payment for the shares, due six months after date. On May 20, Adams indorsed and sold the note to Cooper for $4,800. On October 21, Barton, having learned that Cooper now held the note, notified Cooper of the fraud and stated he would not pay the note. On December 1, Cooper negotiated the note to Davis who, while not a party, had full knowledge of the fraud perpetrated on Barton. Upon refusal of Barton to pay the note, Davis sues Barton for $5,000. Is Davis a holder in due course or, if not, does he have the rights of a holder in due course? Explain.VikarmbhaiWhile James Craig and his former classmate Paul Dolittle both studied accounting at school, they ended up pursuing careers in professional cake decorating. Their company, Good to Eat (GTE), specializes in custom-sculpted cakes for weddings, birthdays, and other celebrations. James and Paul formed the business at the beginning of 2022, and each contributed $60,000 in exchange for a 50 percent ownership interest. GTE also borrowed $240,000 from a local bank. Both James and Paul had to personally guarantee the loan. Both owners provide significant services for the business. The following information pertains to GTE's 2022 activities: GTE uses the cash method of accounting (for both book and tax purposes) and reports income on a calendar-year basis. GTE received $500,000 of sales revenue and reported $230,000 of cost of goods sold (it did not have any ending inventory). GTE paid $35,000 compensation to James, $35,000 compensation to Paul, and $45,000 of compensation to other employees…
- pLamiya and Ghaniya decided to undertake a venture jointly. They maintained a separate set of books. They agreed to share profits & losses in the ratio of 3: 2.Lamiya supplied from her own stock goods worth $ 200,000 and paid $ 4,950 for freight and $ 1,200 for Sundry Expenses. Ghaniya purchased goods of $ 195,000 for the venture and paid 7,000 for selling expenses. Ghaniya sold all the goods for $ 500,000. At the end of the venture, the accounts were settled. Show Joint Venture AccountMiss Wells has purchased the shares of two companies over the years. Each company has only one class of shares. Purchases and sales of shares in the first of these companies, Memo Inc., are as follows: February, 2015 purchase November, 2016 purchase April, 2017 purchase October, 2017 sale September, 2019 purchase November, 2019 sale 60 @ $24 90 @ 28 45 @ 30 (68) @ 36 22 @ 26 (53) @ 40 Purchases and sales of shares in the second company, Demo Ltd., are as follows: April, 2018 purchase December, 2018 purchase July, 2019 sale $24 160 @ (260) @ 36 200 33 Required: A. Determine the cost to Miss Wells of the Memo Inc. shares that are still being held on December 31, 2019. B. Determine the taxable capital gain resulting from the July, 2019 disposition of the Demo Ltd. shares.
- Four unrelated shareholders own Benton Corporation's 400 shares of outstanding stock. As indicated below, Benton redeems a total of 100 shares for $500 per share from three of its shareholders. Each shareholder has a $230 per share basis in his or her stock. Benton's current and accumulated earnings and profits (E&P) at the end of the tax year is $150,000. View the shareholder data. Read the requirements. to Ethel, Fran, and Georgia? Ethel Fran Georgia Amount of income, gain, or loss Ethel Fran Georgia Character of income, gain, or loss Amount of income, gain, or loss 50,000 0 50,000 capital gain capital gain capital gain Requirement b. How would your answer to Part a change if Ethel were Georgia's mother? Character of income, gain, or loss dividend income return of capital Basis of remaining shares dividend income Basis of remaining shares Shareholder Data Shareholder Ethel Fran Georgia Henry Total Shares Held Before the Redemption Print 200 100 50 50 400 Done Shares Redeemed 40 30 30…G is employed by a Canadian-controlled private corporation. In year 1, G was granted a stock option to acquire 1,000 shares from the treasury of his employer's corporation for $8 a share. At the time of receiving the option, the shares were valued at $10 per share. In year 3, G exercised his option and purchased 1,000 shares for $8,000. At the purchase date in year 3, the shares were valued at $15 per share. In year 5, G sold 1,000 shares for $20 per share. What amount is included in G's employment income for tax purposes in year 3?12. Following are the capital account balances and profit and loss percentages (indicated parenthetically) for the William, Jennings, and Bryan partnership: William (40%) $ 280,000 Jennings (40%) 230,000 Bryan (20%) 210,000 Darrow invests $325,000 in cash for a 30 percent ownership interest. The money goes to the business. No goodwill or other revaluation is to be recorded. After the transaction, what is Jennings’s capital balance? Multiple Choice $234,600 $230,000 $327,500 $233,450