What basis does Forest Corporation has in: Equipment Land Office equipment
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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
Basis
Fair Market Value
Number of Shares
Issued
From Elaine:
Cash
Equipment
$60,000
30,000
$60,000
340,000
200 shares
From James:
Land
Mortgage
100,000
140,000
200 shares
540,000
140,000
From Jeremy:
Office equipment
50,000
260,000*
100 shares
Besides the receiving 100 shares of stock, Jeremy also received $60,000 of cash. Forest
Corporation assumed the mortgage transferred by James.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F585055c6-b06c-4ced-af10-4617668120f0%2Fc05802db-ec10-4158-a319-b5925cb19603%2F3fgpmxe_processed.png&w=3840&q=75)
Transcribed Image Text:Elaine, James, and Jeremy form Forest Corporation by transferring the following items to the
corporation:
Items transferred
Basis
Fair Market Value
Number of Shares
Issued
From Elaine:
Cash
Equipment
$60,000
30,000
$60,000
340,000
200 shares
From James:
Land
Mortgage
100,000
140,000
200 shares
540,000
140,000
From Jeremy:
Office equipment
50,000
260,000*
100 shares
Besides the receiving 100 shares of stock, Jeremy also received $60,000 of cash. Forest
Corporation assumed the mortgage transferred by James.
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