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What basis does Forest Corporation has in: Equipment Land Office equipment

What basis does Forest Corporation has in: Equipment Land Office equipment

FINANCIAL ACCOUNTING
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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What basis does Forest Corporation has in:

  • Equipment

  • Land

  • Office equipment
Elaine, James, and Jeremy form Forest Corporation by transferring the following items to the corporation: **Items Transferred** | Issued | Basis | Fair Market Value | Number of Shares | |--------|-------|-------------------|------------------| | **From Elaine:** | | | | | Cash | $60,000 | $60,000 | 200 shares | | Equipment | $30,000 | $340,000 | | | **From James:** | | | | | Land | $100,000 | $540,000 | 200 shares | | Mortgage | $140,000 | $140,000 | | | **From Jeremy:** | | | | | Office Equipment | $50,000 | $260,000* | 100 shares | Notes: - Besides receiving 100 shares of stock, Jeremy also received $60,000 of cash. - Forest Corporation assumed the mortgage transferred by James.
Transcribed Image Text:Elaine, James, and Jeremy form Forest Corporation by transferring the following items to the corporation: **Items Transferred** | Issued | Basis | Fair Market Value | Number of Shares | |--------|-------|-------------------|------------------| | **From Elaine:** | | | | | Cash | $60,000 | $60,000 | 200 shares | | Equipment | $30,000 | $340,000 | | | **From James:** | | | | | Land | $100,000 | $540,000 | 200 shares | | Mortgage | $140,000 | $140,000 | | | **From Jeremy:** | | | | | Office Equipment | $50,000 | $260,000* | 100 shares | Notes: - Besides receiving 100 shares of stock, Jeremy also received $60,000 of cash. - Forest Corporation assumed the mortgage transferred by James.
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