For the following question, provide an explanation of the correct answer and why the other choices...
For the following question, provide an explanation of the correct answer and why the other choices are incorrect. 2) Marsha exchanged land in Florida with an FMV of $72,700 and an adjusted basis of $40,000 for land in lowa with an FMV of $57,700. Marsha also paid $5,000 cash in the transaction and received an automobile worth $20,000. What is Marsha's recognized gain on the transaction? A. $0 B. $15,000 C. $20,000 D. $32,700
provide an explanation of the correct answer and why the other choices are incorrect. 3) Gray is a 50% partner in Fabco Partnership. Gray’s tax basis in Fabco on January 1, year 4, was $5,000. Fabco made no distributions to the partners during year 4 and recorded the following: Ordinary income $20,000 Tax-exempt income 8,000 Portfolio income 4,000 What is Gray’s tax basis in Fabco on December 31, year 4? a) $21,000 b) $16,000 c) $12,000 d) $10,000
Required information [The following information applies to the questions displayed below.) Moran owns a building he bought during year 0 for $198,000. He sold the building in year 6. During the time he held the building he depreciated it by $50,000. What is the amount and character of the gain or loss Moran will recognize on the sale in each of the following alternative situations? (Loss amounts should be indicated by a minus sign. Enter NA if a situation is...
Tom and Gail form Owl Corporation with the following consideration: Consideration Transferred Basis to Transferor Fair Market Value Number of Shares Issued From Tom— Cash $50,000 $50,000 Installment note 240,000 350,000 40 From Gail— Inventory 60,000 50,000 Equipment 125,000 250,000 Patentable invention 15,000 300,000 60 The installment note has a face amount of $350,000 and was acquired last year from the sale of land held for investment purposes (adjusted basis of $240,000). Regarding these transactions, provide the following information: If...
5. Joseph exchanged farmhouse that he used in his farming business for a building used by Sandy in her motorcycle manufacturing business. The farmhouse had a FMV of $345,000 and cost $285,000. The allowable depreciation was $45,000, but because of an error, Joseph only took $25,000 of depreciation. The building had a FMV of $275,000 and an adjusted basis of $315,000. Because the building was expected to increase in value rapidly, Sandy only gave Joseph $45,000 cash. What is Joseph's...
Please select the correct answer and state why it is the correct answer. 1 Alex Co. has the following items listed in the asset section of its balance sheet. Which should be classified as a current asset? A) Investment in held-to-maturity securities. B) Prepaid insurance on a 3-year policy expiring within the year. C) Cash surrender value of life insurance policies. D) Cash to be used for sinking fund payments to retire long-term debt 2 Grown Company is a leading...
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task.
The following condensed trial balance of Gator Co., a publicly
held company, has been adjusted except for income tax expense.
Gator Co.
CONDENSED TRIAL BALANCE
12/31/Year 5
12/31/Year 4
Net
Balances
Balances
Change
Dr.(Cr.)
Dr.(Cr.)
Dr.(Cr.)
Cash
$ 413,000
$ 757,000
$(344,000)
Accounts receivable, net
670,000
610,000
60,000
Property, plant, and equipment
1,070,000
995,000
75,000
Accumulated depreciation
(345,000)
(280,000)
(65,000)
Available-for-sale securities
70,000
60,000
10,000
Dividends payable
(25,000)
(10,000)
(15,000)
Income taxes payable...
Question 11 (2 points) Pat, Helma, and Diane are partners with capital balances of $50,000, $30,000, and $20,000, respectively. The partners share profits and losses equally. For an investment of $50,000 cash, MaryAnn is to be admitted as a partner with a one-fourth interest in capital and profits. Based on this information, the amount of MaryAnn's investment can best be justified by which of the following? Question 11 options: The book value of the partnership's net assets was less than...
Please answer the Multiple choice questions below to the best of your knowledge. This is another chance for those students did not participate in previous questions. Some Terms you might need to know Other Adjustments Account (OAA) Accumulated Adjustments Account (AAA) Previously Taxed Income (PTI) Accumulated Earnings and Profits (AE&P) 1. If the beginning balance in OAA is zero, and the following transactions occur, what is the ending OAA balance? Section 1245 gain $21,000 Payroll tax penalty 4,200 Tax-exempt interest...