INTER. ACCOUNTING - CONNECT+ALEKS ACCESS
10th Edition
ISBN: 9781264770335
Author: SPICELAND
Publisher: MCG
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Jimmy owns two parcels of real estate, Tara and Sundance. Tara is worth $150,000 and Sundance is worth $225,000. Jimmy plans to bequeath Tara directly to his spouse Lois and leave her a life estate in Sundance.
What amount of value will be included in Jimmy's gross estate and taxable estate should he die now?
Arcadia, Incorporated, acquired 100 percent of the voting shares of Bruno Company on January 1, 2023. In exchange, Arcadia pald
$241,000 in cash and Issued 100,000 shares of its own $1 par value common stock. On this date, Arcadia's stock had a fair value of $15
per share. The combination is a statutory merger with Bruno subsequently dissolved as a legal corporation. Bruno's assets and
liabilities are assigned to a new reporting unit.
The following shows fair values for the Bruno reporting unit for January 1, 2023, along with respective carrying amounts on December
31, 2024.
Bruno Reporting Unit
Cash
Receivables
Inventory
Patents
Royalty agreements
Equipment (net)
Goodwill
Accounts payable
Long-term liabilities
Fair Values
1/1/23
$ 74,000
Carrying Amounts
12/31/24
$ 43,000
203,250
238,000
205,500
253,000
583,500
670,000
660,750
630,000
374,500
308,000
?
416,000
(136,000)
(640,500)
(198,000)
(558,000)
Note: Parentheses indicate a credit balance.
Required:
a. Prepare Arcadia's journal…
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