in a taxable acquisition, P corporation, using its own stock and cash, purchases S corporation. The...
in a taxable acquisition, P corporation, using its own stock and cash, purchases S corporation. The shareholders of S own, immediately after purchase, 60% of the P Stock. Which of the following is a true statement?
A. nontaxable merger, in substance, has taken place
B. Because a taxable acquisition occurs, no reverse acquisition has taken place
C. Because of the purchase, P and S are required to file consolidated tax returns.
D. This Transaction meets the criteria of a reverse acquisition.
Homework Answers
Since, immediately after merger the transferor (S Corporation) holds 60% of the Stock of Transferee (P Corporation) it is clear that this transaction meets the criteria of a reverse merger.
Add Answer to:
in a taxable acquisition, P corporation, using its own stock and
cash, purchases S corporation. The...
1. Corporation P files a consolidated return with Corporation S. In preparing a consolidated return, their ...
1. Corporation P files a consolidated return with Corporation S. In preparing a consolidated return, their accountant finds the following: P S Separate taxable income (loss) $500,000 ($200,000) Capital gain (loss) ($25,000) $50,000 Charitable contributions $20,000 $10,000 Dividend from S $10,000 What is the consolidated return taxable income? a. $365,000 b. $295,000 c. $280,000 d. $315,000 2. Jude received a $25,000 distribution from BC Corporation that the corporation identified as $15,000 dividend and $10,000 return of capital. What effect does...
Black Corporation and Tom each own 50% of Tan Corporation’s common stock. On January 1, Tan...
Black Corporation and Tom each own 50% of Tan Corporation’s common stock. On January 1, Tan has a deficit in accumulated E & P of $200,000. Its current E & P is $90,000. During the year, Tan makes cash distributions of $40,000 each to Black and Tom. Black's stock basis before the distribution is $30,000 and Tan's stock basis is $7,000. How are the two shareholders taxed on the distribution and what is the beginning accumulated E&P at the start...
On May 3, Zirbal Corporation purchased 8,500 shares of its own stock for $93,500 cash. On...
On May 3, Zirbal Corporation purchased 8,500 shares of its own stock for $93,500 cash. On November 4, Zirbal reissued 1,750 shares of this treasury stock for $21,000. Prepare the May 3 and November 4 journal entries to record Zirbal's purchase and reissuance of treasury stock. View transaction list Journal entry worksheet Record the purchase of 8,500 shares of its own stock for $93,500 cash. Note: Enter debits before credits. General Journal Credit Date May 03 Debit 93,500 Treasury stock...
38. Navatek Corporation adopts a plan of reorganization and exchanges 1,500 shal stock and $75,000 in...
38. Navatek Corporation adopts a plan of reorganization and exchanges 1,500 shal stock and $75,000 in cash for Santos Corporation's assets having a $300,00 rganization and exchanges 1,500 shares of its voting $375,000 FMV. Santos Corporation is subsequently liquidated. What is Navatek come Santos Corporation's assets having a $300,000 adjusted basis and a basis in the assets acquired in the exchange? A) $225,000 B) $250,000 C) $300,000 D) $375,000 Page Ref: C: 7-16. (Slide 7-11). 39. Identify which of the...
38. Navatek Cor avatek Corporation adopts a plan of reorganization and exchanges 1,500 shares of its voting and $75...
38. Navatek Cor avatek Corporation adopts a plan of reorganization and exchanges 1,500 shares of its voting and $75,000 in cash for Santos Corporation's assets having a $300,000 adjusted basis and a $375,000 FMV. Santos Corporation is subsequently liquidated. What is Navatek Corporation's basis in the assets acquired in the exchange? A) $225,000 B) $250,000 C) $300,000 D) $375,000 Page Ref: C: 7-16. (Slide 7-11). 39. Identify which of the following statements is false. A) In a Type C reorganization,...
Consolidation Eliminations Several Years after Acquisition Paramount Corporation acquired its 75 percent investment in Sun Corporation...
Consolidation Eliminations Several Years after Acquisition Paramount Corporation acquired its 75 percent investment in Sun Corporation in January 2012 for $3,492.000 and accounts for its investment internally using the complete equity method. At the acquisition date, total book value of Sun was $1,800,000 including $960,000 of retained earnings, and the estimated fair value of the 25 percent noncontrolling interest was $948,000. The fair values of Sun's assets and liabilities were equal to their carrying values, except for the following items:...
Consolidation Eliminations Several Years after Acquisition Paramount Corporation acquired its 75 percent investment in Sun Corporation...
Consolidation Eliminations Several Years after Acquisition Paramount Corporation acquired its 75 percent investment in Sun Corporation in January 2012, for $5,820,000 and accounts for its investment internally using the complete equity method. At the acquisition date, total book value of Sun was $3,000,000 including $1,600,000 of retained earnings, and the estimated fair value of the 25 percent noncontrolling interest was $1,580,000. The fair values of Sun's assets and liabilities were equal to their carrying values, except for the following items:...
Consolidated Balance Sheet Working Paper, Bargain Purchase On December 31, 2012, Paxon Corporation acquired all of...
Consolidated Balance Sheet Working Paper, Bargain Purchase On December 31, 2012, Paxon Corporation acquired all of the outstanding common stock of Saxon Company for $2.88 billion cash. The balance sheets of Paxon and Saxon, immediately prior to the combination, are shown below: Balance Sheets (in millions) Paxon Saxon Assets Cash and receivables $4,576 $1,152 Inventory 2,720 1,440 Equity method investments -- 480 Land 1,040 280 Buildings and equipment, net 3,840 960 Total assets 12,176 4,312 Liabilities and Shareholders' Equity Current...
On December 31, Year 1, P Company purchased 90% of the outstanding shares of S Company for $8,100 cash. The statements of financial position of the two companies immediately after the acquisition transaction appear below. P Company S Company C
On December 31, Year 1, P Company purchased 90% of the outstanding shares of S Company for $8,100 cash. The statements of financial position of the two companies immediately after the acquisition transaction appear below. P CompanyS CompanyCarrying AmountCarrying AmountFair ValuePlant and equipment (net)$9,500$7,200$6,300Investment in S Company8,100Inventory6,5605,3005,600Accounts receivable5,9503,2003,200Cash4,3002,4502,450$34,410$18,150Ordinary shares$11,900$4,400Retained earnings15,4105,050Long-term liabilities4,4003,4003,400Other current liabilities1,4003,2003,200Accounts payable1,3002,1002,100$34,410$18,150 Required:(a) Prepare a consolidated statement of financial position in order of liquidity i.e starting with cash at the date of acquisition under each of the following: (i) Identifiable net assets method (ii) Fair value...
QUESTION 1 Manuela has worked as an accountant in her own accounting business, a sole proprietorship,...
QUESTION 1 Manuela has worked as an accountant in her own accounting business, a sole proprietorship, for more than seven years. Among the services she offers is tax return filing and personal investment advising. Which of the following is true of Manuela’s business? A. Manuela has little control over the management and operations of her business. B. Manuela has unlimited liability. C. Outside funding for the business has been easy for Manuela to obtain. D. Manuela had varied and complicated...
On May 3, Zirbal Corporation purchased 8,500 shares of its own stock for $93,500 cash. On November 4, Zirbal reissued 1,750 shares of this treasury stock for $21,000. Prepare the May 3 and November 4 journal entries to record Zirbal's purchase and reissuance of treasury stock. View transaction list Journal entry worksheet Record the purchase of 8,500 shares of its own stock for $93,500 cash. Note: Enter debits before credits. General Journal Credit Date May 03 Debit 93,500 Treasury stock...
38. Navatek Corporation adopts a plan of reorganization and exchanges 1,500 shal stock and $75,000 in cash for Santos Corporation's assets having a $300,00 rganization and exchanges 1,500 shares of its voting $375,000 FMV. Santos Corporation is subsequently liquidated. What is Navatek come Santos Corporation's assets having a $300,000 adjusted basis and a basis in the assets acquired in the exchange? A) $225,000 B) $250,000 C) $300,000 D) $375,000 Page Ref: C: 7-16. (Slide 7-11). 39. Identify which of the...
38. Navatek Cor avatek Corporation adopts a plan of reorganization and exchanges 1,500 shares of its voting and $75,000 in cash for Santos Corporation's assets having a $300,000 adjusted basis and a $375,000 FMV. Santos Corporation is subsequently liquidated. What is Navatek Corporation's basis in the assets acquired in the exchange? A) $225,000 B) $250,000 C) $300,000 D) $375,000 Page Ref: C: 7-16. (Slide 7-11). 39. Identify which of the following statements is false. A) In a Type C reorganization,...
Consolidation Eliminations Several Years after Acquisition Paramount Corporation acquired its 75 percent investment in Sun Corporation in January 2012 for $3,492.000 and accounts for its investment internally using the complete equity method. At the acquisition date, total book value of Sun was $1,800,000 including $960,000 of retained earnings, and the estimated fair value of the 25 percent noncontrolling interest was $948,000. The fair values of Sun's assets and liabilities were equal to their carrying values, except for the following items:...
Consolidated Balance Sheet Working Paper, Bargain Purchase On December 31, 2012, Paxon Corporation acquired all of the outstanding common stock of Saxon Company for $2.88 billion cash. The balance sheets of Paxon and Saxon, immediately prior to the combination, are shown below: Balance Sheets (in millions) Paxon Saxon Assets Cash and receivables $4,576 $1,152 Inventory 2,720 1,440 Equity method investments -- 480 Land 1,040 280 Buildings and equipment, net 3,840 960 Total assets 12,176 4,312 Liabilities and Shareholders' Equity Current...
Most questions answered within 3 hours.
-
Find the complete optimal solution to this linear programming
problem. Max 5x + 3y s.t. 2x...
asked 1 minute ago -
The pH of an acetate buffer was determined to be 4.76. Then, a
few drops of...
asked 4 minutes ago -
a sample of size 1500 is used to find a confidence
interval for the percentage of...
asked 13 minutes ago -
Explain in detail the differences between qualitative and
quantitative forecasts. Include at least two examples of...
asked 17 minutes ago -
Differentiate between response time and throughput.
Explain how the physical design of a database influences
performance...
asked 19 minutes ago -
Write MATLAB code to plot the following
waveforms.
Rectangular pulses:
????(?)
????(? − ?)
????(?/?) ...
asked 19 minutes ago -
4. Adam’s Inc.’s outstanding common stock is currently selling
in the market for $28. Dividends of...
asked 30 minutes ago -
question
you were
asked to create a regression that will predict the amount of saving
for...
asked 37 minutes ago -
If tcalc = -2.78, tcrit = 1.96, H0: Mu > Mu0, and Xbar <
Mu0, what...
asked 59 minutes ago -
Circular distribution
•Suppose two birds are flying, one is flying from the north and
the other...
asked 58 minutes ago -
please answer all... it all counts as a discussion problem
1a qualitative data and proportions: Suppose...
asked 1 hour ago -
Typing The Answer Is Mandatory
Temperature is a measure of heat. More heat means that more...
asked 53 minutes ago