Vine Corporation has a single class of common stock outstanding. Tia owns 1,000 shares, which she purchased five years ago for $180,000. Vine declares a stock dividend payable in 8% preferred stock having a $130 par value. Each shareholder receives one share of preferredstock for ten shares of common stock. On the distribution date-January 2 of the current year the common stock was worth $247 per share, and the preferred stock was worth $130 per share. On April 1 of the current year, Tia sells half of her preferred stock for $11,000.Read the requirements.(Complete all input fields. Enter a 0 where appropriate.)Requirementsa.b.C.How much income must Tia recognize when she receives thestock dividend?How much gain or loss must Tia recognize when she sellspreferred stock? (Ignore the implications of Sec. 306.)What is Tia's basis in her remaining common and preferred shares afterthe sale? When does her holding period for the preferred shares begin?PrintDoneX

Answer:- Stock dividend meaning:- The dividend is the portion of profits that shareholders receive…

Answered: Vine Corporation has a single class of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Shetland Corporation, a C corporation, has E&P of $1,000,000. The corporation stock is held as follows: Matthew 1,000 shares Aaron 1,000 shares Fay 1,000 shares Marlyebone Partnership 1,000 shares Devon Corp. 1,000 shares Total Shares 5,000 shares Matthew would like to redeem 500 shares of stock. The fair market value of the stock is $200,000. Matthew acquired the stock 10 years ago and has a basis of $200/share in her stock. Note: Since Shetland Corporation is not traded on an exchange, Matthew does not have the option for selling his stock on an open market. Here is additional information about Shetland Corporation: · Aaron is Matthew’s first cousin · Fay is Matthew’s mother · Matthew owns 10% of Marlyebone Partnership · Matthew owns 20% of the shares in Devon Corporation a. Will this redemption of 500 shares of Matthew’s stock be treated as a qualified stock redemption or will it be treated as a distribution? Support your answer with calculations. b. How much tax must…
When Ale Co. started operating in Year 1, it issued 750,000 shares of common stock. In Year 2, the company issued 50,000 more shares of common stock and 100,000 shares of preferred stock (with each preferred share convertible into one common share). In Year 3, 40 percent of the preferred shares were converted into common shares. At the end of Year 3, the company underwent a 4-for-1 stock split. Determine the total number of outstanding common stock shares at the end of Year 3.
Warhol Company has 2,000 shares of $0.50 par value common shares authorized. On March 1, Warhol sold 1,550 shares for $10 per share. On May 1 of the same year, Warhol reacquired 550 of those shares for $11 each. Over the next several months, the market price of the shares increased and Warhol Company reissued 150 shares at $15 per shares. By December 1, the company reissued the remaining 400 shares. At that time, the market price of the shares had fallen to $9 per share. What is the entry the company would make on December 1st to record the reissue of 400 shares of treasury stock? Responses Cash 3,600 Capital in Excess of Cost - Treasury Stock 400 Retained Earnings 400 Treasury Stock 4,400 Cash…
Brilliant Ltd is a private limited by shares incorporated under Cap. 622. It has firstly issued 5,000 ordinary shares, and subsequently 10,000 8% redeemable preference shares. Both types of shares are issued at $2 each. All monies have been collected for the issued shares.The articles of association of Brilliant states that the preference dividend of the preference shares is to be paid out of yearly profits, and that the holders of the shares only have the right to vote at a meeting of the company when their dividend has not been paid or their rights are being varied.Brilliant has made substantial profits in the initial years and accumulated handsome profits on reserve. In recent years it applied some profits for expansion, but its business deteriorated after expansion. Though it still has positive profits reserve, it has not generated profits for a few years until the last year. In the past three years it did not declare a dividend. The preference shareholders are unhappy about not…
Trish owns 250 shares of stock, with a basis of $2,500. The stock split 2 for 1. Trish now owns ______ shares at ______ per share.500 shares at $5 per share.500 shares at $10 per share.250 shares at $5 per share.250 shares at $10 per share.
At the end of 20x6, Jabba the Hutt's Hot Dog Hut had 350,000 shares of $1 par value common stock issued and outstanding. In addition, Jabba had 94,000 shares of $5 par value, 10% cumulative preferred stock as part of his shareholder's equity. All of Jabba's stock, both common and preferred, has been outstanding since the company was incorporated at the beginning of 20x5. Jabba did not declare any dividends in 20x5, but he declares and pays a $140,000 cash dividend on December 31, 20x6. Determine the amount of cash that will be distributed to each class of Jabba's stockholders' equity for this two-year-old company. Calculation of preferred dividend: Total cash dividend To preferred shareholders To common shareholders Par Value per Preferred Share $ 0 Dividend Rate % Dividend per Number of Preferred Preferred Share Shares Preferred Dividend for two years
The D asenso corp issued 5000 shares of common stock at 100.00 per share. Of this, Eugene owns 500 shares which he acquired at 100 per share. In December, 2013 the corporation declared and paid 25% stock dividend payable in preferred stock. Eugene sold all his stock dividend shares at 120 per share on February 10, 2014. Required: a. Compute the gain or loss on sale of stock dividend shares, assuming that at the time of payment of the stock dividend, the fair market value of the shares of stock are: Common: 110 per share Preferred: 110 per share b. Compute the capital gain due on said sale
Vine Corporation has a single class of common stock outstanding. Tillie owns 1,000 shares, which she purchased five years ago for $120,000. Vine declares a stock dividend payable in 8% preferred stock having a $230 par value. Each shareholder receives one share of preferred stock for ten shares of common stock. On the distribution date—December 16 of the current year—the common stock was worth $437 per share, and the preferred stock was worth $230 per share. On April 1 of the next year, Tillie sells half of her preferred stock for $12,000. How much gain or loss must Tillie recognize when she sells the preferred stock? (Ignore the implications of Sec. 306 .) Do not give answer in image
EllaJane Corporation was organized several years ago and was authorized to issue 4,000,000 shares of $50 par value 8% preferred stock. It is also authorized to issue 1,750,000 shares of $1 par value common stock. In its fifth year, the corporation has the following transactions: Mar. 1 Purchased 1,500 shares of its own common stock at $12 per share. Apr. 10 Reissued 750 shares of its common stock held in the treasury for $16 per share. Jun. 12 Reissued 750 shares of common stock at $10 per share. Prepare the journal entries to record the transactions. If an amount box does not require an entry, leave it blank. Mar. 1 fill in the blank 2 fill in the blank 3 fill in the blank 5 fill in the blank 6 Apr. 10 fill in the blank 8 fill in the blank 9 fill in the blank 11 fill in the blank 12 fill in the blank 14 fill in the blank 15 Jun. 12 fill in the blank 17 fill in the blank 18 fill in the blank 20 fill in the blank 21 fill in the…
California Surf Clothing Company issues 1,000 shares of $1 par value common stock at $20 per share. Later in the year, the company decides to purchase 100 shares at a cost of $23 per share. Record the transaction if California Surf resells the 100 shares of treasury stock at $25 per share. Record the sale of treasury stock.
on January 1, T purchased both a bond and stock of CorporationX. The bond was purchased for $10,000, had a face value of $10,000 and paid 10% interest on December 31 of each year. The stock was purchased for $10,000 and paid a dividend of $1,000 on December 31. T sold both the stock and bond on July 1 of the same year. The bond sold for $10,300 and the stock for $11,000. What income, gain or loss, including character type (eg capital gain, interest, dividend, ordinary will T recognize as a result of the sales?
Aggregate Mining Corporation was incorporated five years ago. It is authorized to issue 500,000 shares of $100 par value 10% preferred stock. It is also authorized to issue 750,000 shares of $1 par value common stock. It has issued only 40,000 of the common shares and none of the preferred shares. In its sixth year, the corporation has the following transactions: Mar. 1 Declares a cash dividend of $2 per share. Mar. 30 Pays the cash dividend. Jul. 10 Declares a 5% stock dividend when the stock is trading at $20 per share. Aug. 5 Issues the stock dividend. Prepare the journal entries to record the transactions. If an amount box does not require an entry, leave it blank. Mar. 1 fill in the blank 2 fill in the blank 3 fill in the blank 5 fill in the blank 6 Mar. 30 fill in the blank 8 fill in the blank 9 fill in the blank 11 fill in the blank 12 Jul. 10 fill in the blank 14 fill in the blank 15 fill in the blank 17 fill in the blank 18…

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