TAXATION OF INDIVIDUALS+BUSINESS ENT.>C
20th Edition
ISBN: 9781307520422
Author: SPILKER
Publisher: MCG/CREATE
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Chapter 15, Problem 61CP
1.
To determine
Ascertain the tax and nontax issues related to the conversion of Company C from C Corporation to S Corporation.
2.
To determine
Ascertain the tax and nontax issues related to the conversion of Company C from C Corporation to an LLC.
3.
To determine
Ascertain the tax and nontax issues related to the conversion of Company C a C Corporation with net operating loss of $2,000,000 to an LLC.
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Problem No. 2
The trial balance of Cleint Lumanao Nacho Supplies on February 10, 2025, before accepting Shila Tajonera as
partner is shown as follows:
Account Title
Debit
Credit Ato
Cash
reening smuo P 100,000
Accounts Receivable
250,000
Allowance for Uncollectible Accounts
P 20,000 o
Merchandise Inventory
Equipment
Accumulated Depreciation
Accounts Payable
Notes Payable
120,000
275,000
55,000
50,000
82,000
538,000
Lumanao, Capital
Total
P 745,000
P 745,000
Tajonera offered to invest cash to get a capital credit equal to one-half of Lumanao's capital after giving effect to the
adjustments below. Lumanao accepted the offer.
Valuation of some of the assets and liabilities of Lumanao, as agreed by the partners, are the following:
• The merchandise is to be valued at P93,000.
The accounts receivable is estimated to be 90% collectible.
• The equipment is to be valued at P200,000.
The partners also agreed that the name of the partnership will be Nacho Business.
Required:
1. In the books of…
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Chapter 15 Solutions
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