Ramona and Hermione formed Wiley Corporation on January 2. Ramona contributed cash of $220,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted tax bases in return for 50 percent of the corporation's stock: Building Land Total FMV $ 82,500 192,500 $ 275,000 Adjusted Tax Basis $ 22,000 88,000 $ 110,000 To equalize the exchange, Wiley Corporation paid Hermione $55,000 in addition to her stock.

Ramona and Hermione formed Wiley Corporation on January 2. Ramona contributed cash of $220,000 in return for 50 percent of the corporation's stock. Hermione contributed a building and land with the following fair market values and adjusted tax bases in return for 50 percent of the corporation's stock: Building Land Total FMV $ 82,500 192,500 $ 275,000 Adjusted Tax Basis $ 22,000 88,000 $ 110,000 To equalize the exchange, Wiley Corporation paid Hermione $55,000 in addition to her stock.

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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