Answered: Merrit Company acquired a building… | bartleby

CONCEPTS IN FED.TAX.,2020-W/ACCESS

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 44P

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Question

What amount should the building be recorded?

Merrit Company acquired a building
valued at $190,000 for property tax
purposes in exchange for 12,000
shares of $5 par common stock. The
stock is selling for $15 per share. At
what amount should the building be
recorded?

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Kansas Company acquired a building valued at $170,000 for property tax purposes in exchange for 12,000 shares of its $7 par common stock. The stock is widely traded and selling for $20 per share. At what amount should the building be recorded by Kansas Company?
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Kansas Company acquired a building valued at $210,000 for property tax purposes in exchange for 12,000 shares of its $5 par common stock. The stock is widely traded and sold for $15 per share. At what amount should the building be recorded by Kansas Company? $180,000 $210,000 $60,000 $120,000
Paula Company had the following property acquisitions during the current year: Acquired a tract of land and building in exchange for 50,000 ordinary shares of P100 par value with a market price of P120 per share on the date of acquisition. The last property tax bill indicated assessed value of P1,200,000 for the land and P2,800,000 for the building. However, the land has a fair value of P2,000,000 and the building has fair value of P3,500,000. Received land from a major shareholder as an inducement to locate a plant in the city. No payment was required but the entity paid P50,000 for legal expenses for land transfer. The land is fairly valued at P1,000,000. • Acquired a welding machine with an invoice price of P3,000,000 subject to a cash discount of 10% which was not taken. The entity incurred cost of P50,000 in removing the old welding machine prior to the installation of the new one. Welding supplies were acquired at a cost of P150,000. What is the total increase in property, plant…
Karlyn Company had the following property acquisitions during the current year:• Acquired a tract of land with an existing building in exchange for 50,000 ordinary shares of P100 par value with a market price of P120 per share on the date of acquisition. The last property tax bill indicated assessed value of P2,800,000 for the land and P1,200,000 for the building. However, the land has a fair value of P5,500,000 and the building has no determinable fair value. Shortly after acquisition, the building was razed at a cost of P100,000 in anticipation of a new building construction.• Received land from a major shareholder as an inducement to locate a plant in the city. No payment was required but Karlyn Company paid P50,000 for legal expenses for land transfer. The land is fairly valued at P2,000,000.What is the total increase in land as a result of the acquisition
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The Berry Corporation owns a building with a basis of $40,000 that is subject to a debt of $ 160,000. The FMV of the building is $100,000. Berry distributes the property in a nonliquidating distribution (along with the debt) to Delia, its sole shareholder. What is the amount of the distribution to Delia? a. $80,000. b. $50,000. c. zero. d. $30,000. e. none of the above.
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Firm UT sold realty to an unrelated buyer for $40,000 cash plus the buyer’sassumption of a $166,700 mortgage on the property. UT’s initial cost basis in the realtywas $235,000, and accumulated tax depreciation through date of sale was $184,200.Required:a. Compute UT’s gain recognized on the sale.b. Assuming a 21 percent marginal tax rate, compute UT’s after-tax cash flow from thesale. Required A Required B Complete this question by entering your answers in the tabs below
Sunny receives a property distribution from Cloudy Corp. The distributed property had a FMV of $5,000 and a basis of $2,000. Assume Cloudy Corp has positive E&P for the distribution. What is the gain to Cloudy Corp? What is the dividend to Sunny? What is the net adjustment to Cloudy Corp E&P 0 5000 -5000
On August 1, ABC Company acquired a real property for P 4,420,000. The shares were selling on the same date at P 125. The fair values are P 800,000 and P 3,200,000 for the land and building respectively. A mortgage of P 4,000,000 was assumed by ABC on the purchase. Moreover, the company paid P 180,000 of real property taxes in the prior years. ABC paid legal fees including title search for P 15,000. ABC also paid the local government special assessment for city improvement amounting to P 120,000. In order to make the building suitable for the use of ABC, remodeling costs had to be incurred in the amount of P 900,000. This however, necessitated the demolition of a portion of the building, which resulted in recovery of salvage material sold for P 30,000. Parking lot cost the company, P 320,000 while repairs in the main hall were incurred at P45,000 prior to its use. What is the correct cost of the land? P1,720,000 P2,535,000 P1,855,000 P1,799,000

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