Ch 8 HWSavedHelpSave & ExitSubmitCheck my work1Ramon incorporated his sole proprietorship by transferring inventory, a building, and land to the corporation in return for100 percent of the corporation's stock. The property transferred to the corporation had the following fair market valuesand adjusted bases:Part 1 of 3FMV$ 33,50054, 000198, 000AdjustedBasis$ 9, 30030, 250InventoryBuilding0.33Land87,000pointsTotal$285, 500$126, 550eBookThe fair market value of the corporation's stock received in the exchange equaled the fair market value of the assetstransferred to the corporation by Ramon. (Leave no answer blank. Enter zero if applicable. Negative amount should beindicated by a minus sign.)HintPrintReferencesa. What amount of gain or loss does Ramon realize on the transfer of the property to his corporation?Gain or loss realizedMcGrawHillEducationPrev123of 15Next >

When an asset is exchanged at a fair price between knowledgeable and desirous parties, the sum for…

Ramon incorporated his sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the corporation had the following fair market values and adjusted bases: Adjusted Basis $ 9, 300 FMV Inventory Building Land $ 33, 500 54,000 198, 000 30, 250 87,000 Total $285,500 $126, 550 The fair market value of the corporation's stock received in the exchange equaled the fair market value of the assets transferred to the corporation by Ramon. (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) a. What amount of gain or loss does Ramon realize on the transfer of the property to his corporation? Gain or loss realized

Ramon incorporated his sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the corporation had the following fair market values and adjusted bases: Adjusted Basis $ 9, 300 FMV Inventory Building Land $ 33, 500 54,000 198, 000 30, 250 87,000 Total $285,500 $126, 550 The fair market value of the corporation's stock received in the exchange equaled the fair market value of the assets transferred to the corporation by Ramon. (Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.) a. What amount of gain or loss does Ramon realize on the transfer of the property to his corporation? Gain or loss realized

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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Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the corporation had the following fair market values and adjusted bases: FMV Adjusted Basis 60,000 $ 30,000 Inventory Building Land Total 450,000 690,000 $1,200,000 300,000 900,000 $1,230,000 The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporation's stock received in the exchange was $1,100,000. The transaction met the requirements to be tax-deferred under $351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) Assume the corporation assumed a mortgage of $1,300,000 attached to the building and land. Assume the fair market value of the building is now $750,000 and the fair market value of the land is $1,590,000. The fair market value of the stock remains $1,100,000. e. How…
Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation’s stock. The property transferred to the corporation had the following fair market values and adjusted bases: FMV Adjusted Basis Inventory $ 60,000 $ 30,000 Building 450,000 300,000 Land 690,000 900,000 Total $ 1,200,000 $ 1,230,000 Assume the corporation assumed a mortgage of $1,300,000 attached to the building and land. Assume the fair market value of the building is now $750,000 and the fair market value of the land is $1,590,000. The fair market value of the stock remains $1,100,000. What is the corporation’s adjusted basis in each of the assets received in the exchange?(Do not round intermediate calculations.)
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On January 1, 2024, Mel purchased 100% of Troy's outstanding shares in exchange for 100,000 shares of its $1 par common stock with a fair value of $17 per share. On this date, the book value of Troy's net assets was $1,200,000. The fair values of Troy's identifiable assets and liabilities were the same as their carrying amounts except for land which had a fair value of $300,000 more than its book value. The journal entry on Mel’s books to record the acquisition will include Question 2Select one: a debit to Goodwill for $500,000. a debt to Land for $300,000. a credit to Common Stock for $1,700,000. a debit to Investment in Sub for $1,700,000.
(1) DEF Corporation distributes a building to Jones, an individual and fifty (50) percent shareholder. The building has a FMV of $50,000 and an adjusted basis of $32,000. Without considering the distribution of the building to Jones, DEF Corporation had earnings and profits of $26,500. Jones adjusted basis in his interest in DEF Corporation was equal to $15,000. (a) What is the amount of the section 301 distribution to Jones? (b) What is Jones' basis in the building following its distribution to Jones? (c) What is the amount of gain recognized by DEF Corporation as a result of the distribution of the building to Jones? (d) What is the character of the distribution to Jones and what is the amount of DEF's earnings and profits following the distribution?
Planet Corporation acquired 100 percent of the voting common stock of Saturn Company on January 1, 20X7, by issuing bonds with a par value and fair value of $670,000 and making a cash payment of $24,000. At the date of acquisition, Saturn reported assets of $740,000 and liabilities of $140,000. The book values and fair values of Saturn’s net assets were equal except for land and copyrights. Saturn’s land had a fair value $16,000 higher than its book value. All of the remaining purchase price was attributable to the increased value of Saturn’s copyrights with a remaining useful life of eight years. Saturn Company reported a loss of $88,000 in 20X7 and net income of $120,000 in 20X8. Saturn paid dividends of $24,000 each year. Required: Assuming that Planet Corporation uses the equity method in accounting for its investment in Saturn Company, prepare all journal entries for Planet for 20X7 and 20X8.