!Required InformationProblem 18-67 (LO 18-5) (Algo)[The following information applies to the questions displayed below]Nall Corporation made a distribution of $613,760 to Rusty In partial liquidation of the company on December 31 of thisyear. Rusty, an Individual, owns 100 percent of Nall Corporation. The distribution was in exchange for 50 percent of Rusty'sstock in the company. At the time of the distribution, the shares had a fair market value of $224 per share. Rusty's taxbasis in the shares was $50 per share. Nall had total E&P of $8.185.000 at the time of the distribution.Problem 18-67 Part b (Algo)b. Assuming Nail made no other distributions to Rusty during the year, by what amount does Nall reduce its total E&P because of thepartial liquidation?Reduction in E&P Required InformationProblem 18-67 (LO 18-5) (Algo)[The following information applies to the questions displayed below]Nall Corporation made a distribution of $613,760 to Rusty in partial liquidation of the company on December 31 of thisyear. Rusty, an Individual, owns 100 percent of Nall Corporation. The distribution was in exchange for 50 percent of Rusty'sstock in the company. At the time of the distribution, the shares had a fair market value of $224 per share. Rusty's taxbasis in the shares was $50 per share Nail had total E&P of $8,185.000 at the time of the distribution.Problem 18-67 Part a (Algo)a. What are the amount and character (capital gain or dividend) of any income or gain recognized by Rusty because of the partialliquidation?per share

Partial liquidation - is related to the distribution made by a company due to the redemption of a…

Answered: Required Information Problem 18-67 (LO…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

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Chapter1: Financial Statements And Business Decisions

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Nail Corporation made a distribution of $589, 110 to Rusty in partial liquidation of the company on December 31 of this year. Rusty, an individual, owns 100 percent of Nail Corporation. The distribution was in exchange for 50 percent of Rusty's stock in the company. At the time of the distribution, the shares had a fair market value of $219 per share. Rusty's tax basis in the shares was $ 50 per share. Nail had total E&P of $8,485,000 at the time of the distribution. a. What are the amount and character (capital gain or dividend) of any income or gain recognized by Rusty because of the partial liquidation? Capital gain/ Dividend . . . . . . . ./ per share b. Assuming Nail made no other distributions to Rusty during the year, by what amount does Nail reduce its total E&P because of the partial liquidation?
Problem 6-25 (Algo) (LO 6-3) Cairns owns 80 percent of the voting stock of Hamilton, Incorporated. The parent's interest was acquired several years ago on the date that the subsidiary was formed. Consequently, no goodwill or other allocation was recorded in connection with the acquisition. Cairns uses the equity method in its internal records to account for its investment in Hamilton. On January 1, 2020, Hamilton sold $1,000,000 in 10-year bonds to the public at 110. The bonds had a cash interest rate of 8 percent payable every December 31. Cairns acquired 40 percent of these bonds at 92 percent of face value on January 1, 2022. Both companies utilize the straight-line method of amortization. Required: Prepare the consolidation worksheet entries to recognize the effects of the intra-entity bonds at each of the following dates. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. a. December 31, 2022 b. December 31, 2023…
Required information Problem 18-67 (LO 18-5) (Algo) [The following information applies to the questions displayed below] Nail Corporation made a distribution of $589,110 to Rusty in partial liquidation of the company on December 31 of this year. Rusty, an individual, owns 100 percent of Nail Corporation. The distribution was in exchange for 50 percent of Rusty's stock in the company. At the time of the distribution, the shares had a fair market value of $219 per share. Rusty's tax basis in the shares was $50 per share. Nail had total E&P of $8,485,000 at the time of the distribution. Problem 18-67 Part a (Algo) a. What are the amount and character (capital gain or dividend) of any income or gain recognized by Rusty because of the partial liquidation? Answer is complete but not entirely correct. Capital gain $ 224 per share
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Blue Corp. purchased 100% of the stock of Magenta Corp. in 1984 for $300,000. Early this year, Magenta was liquidated. Blue Corp. received all of Magenta’s assets, which had a basis to Magenta Corp. of $420,000 and a FMV of $440,000. Assume the requirements of §332 were satisfied. What about of gain will Blue Corp. recognize any gain as a result of the liquidation?
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Please help me solve questions 1 2 & 3. Thank you! Placid Lake Corporation acquired 70 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2017, when Scenic had a net book value of $440,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $7,000 per year. Placid Lake's 2018 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $340,000. Scenic reported net income of $150,000. Placid Lake declared $140,000 in dividends during this period; Scenic paid $44,000. At the end of 2018, selected figures from the two companies' balance sheets were as follows: Placid Lake Scenic Inventory $ 180,000 $ 94,000 Land 640,000 240,000 Equipment (net) 440,000 340,000 During 2017, intra-entity sales of $95,000 (original cost of $50,000) were made. Only 10 percent of this inventory was still held within the consolidated entity at the end of…
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(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?

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