Question

Company Y is liquidating. It has two shareholders, Amanda and Heather. Amanda owns 60 shares (with...

Company Y is liquidating. It has two shareholders, Amanda and Heather. Amanda owns 60 shares (with a $6,000 a/b) and Heather owns 40 shares (with a $3,000 a/b). Company Y will distribute each of its assets pro rata to its shareholders.

                                                      A/B                 FMV

         Cash                                     2,000               2,000

         Building                               8,000               6,000

         Goodwill                              1,000               2,000

         Gain/Loss to Company Y: ________________________________________

         Gain/Loss to A: ______________________________________________

         Gain/Loss to H: ______________________________________________

         Adjusted basis Amanda will have in her share of the building: ________________

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due. As company operations end, the remaining assets are used to pay creditors and shareholders, based on the priority of their claims.

Gain/Loss to Company Y

Cash(2000-2000) 0
Building(8000-6000) -2000
Goodwill(1000-2000) 1000
Loss -2000

Gain Loss to A

Cash 1200
Building 3600
Goodwill 1200
Investment 6000
Net 0

Gain Loss to H

Cash 800
Building 2400
Goodwill 800
Investment 3000
Net gain 1000

Adjusted basis Amada will have in share of building

FMV of Building 6000
Amada will have in the share of building 3600
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Company Y is liquidating. It has two shareholders, Amanda and Heather. Amanda owns 60 shares (with...
Company Y is liquidating. It has two shareholders, Amanda and Heather. Amanda owns 60 shares (with a $6,000 a/b) and Heather owns 40 shares (with a $3,000 a/b). Company Y will distribute the building to Amanda and the cash and goodwill to Heather.                                                       A/B                 FMV          Cash                                     2,000               2,000          Building                               6,000               8,000          Goodwill                              2,000               1,000          Gain/Loss to Company Y: ________________________________________          Gain/Loss to A: ______________________________________________          Gain/Loss to H: ______________________________________________          Adjusted basis Amanda will...
Company Y is liquidating. It is wholly owned by X Company (which has a $10,000 a/b...
Company Y is liquidating. It is wholly owned by X Company (which has a $10,000 a/b in the Company Y shares). It plans to distribute the following assets (all held for 8 years) to Company X.                                                       A/B                 FMV          Cash                                     2,000               2,000          Inventory                             8,000               6,000          Goodwill                              1,000               2,000          Gain/Loss to Company Y: ________________________________________          Gain/Loss to Company X: ______________________________________________          Adjusted basis Company X will have in the inventory: ______________________
In a liquidating distribution, Ryan Inc distributes land to its shareholders. Ryan Inc acquired the land...
In a liquidating distribution, Ryan Inc distributes land to its shareholders. Ryan Inc acquired the land 3 years ago in a §351 transfer. Ryan Inc distributes land with FMV of $1,800,000, adjusted basis of $400,000 pro-rata to its two individual shareholders Adama and Brent. Adam and Brent do not get along and are not related to each other. Adam (80%) owner has stock basis of $87,000. Brent (20%) owner has stock basis of $20,000. a. What is the tax result...
Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions Inc. (WFI). After liquidating...
Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions Inc. (WFI). After liquidating its remaining inventory and paying off its remaining liabilities, WFI had the following tax accounting balance sheet:    Adjusted FMV    Basis Appreciation Cash $ 155,000    $ 155,000 Building 31,000    15,500    15,500 Land 124,000 62,000 62,000 Total $ 310,000 $ 232,500 $ 77,500 Under the terms of the agreement, Shauna will receive the $155,000 cash in exchange for her 50 percent...
Tiffany and Carlos decided to liquidate their jointly owned corporation, Royal Oak Furniture (ROF). After liquidating...
Tiffany and Carlos decided to liquidate their jointly owned corporation, Royal Oak Furniture (ROF). After liquidating its remaining inventory and paying off its remaining liabilities, ROF had the following tax accounting balance sheet: FMV Adjusted Basis Appreciation (Depreciation) Cash $ 409,750 $ 409,750 Building 73,250 24,000 49,250 Land 336,500 397,500 (61,000 ) Total $ 819,500 $ 831,250 $ (11,750 ) Under the terms of the agreement, Tiffany will receive the $409,750 cash in exchange for her 50 percent interest in...
Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions, Inc. (WFI). After liquidating...
Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions, Inc. (WFI). After liquidating its remaining inventory and paying off its remaining liabilities, WFI had the following tax accounting balance sheet.                                                        FMV         Adjusted Basis          Appreciation             Cash                          $ 200,000     $     200,000             Building                           50,000               10,000                       40,000             Land                               150,000               85,000                       65,000             Total                           $  400,000     $     295,000              $    105,000           Under the terms of the agreement, Shauna will receive the $200,000 cash in exchange for her 50 percent interest in WFI. Shauna’s tax...
Tiffany and Carlos decided to liquidate their jointly owned corporation, Royal Oak Furniture (ROF). After liquidating...
Tiffany and Carlos decided to liquidate their jointly owned corporation, Royal Oak Furniture (ROF). After liquidating its remaining inventory and paying off its remaining liabilities, ROF had the following tax accounting balance sheet: FMV Adjusted Basis Appreciation (Depreciation) Cash $ 409,750 $ 409,750 Building 73,250 24,000 49,250 Land 336,500 397,500 (61,000) Total $ 819,500 $ 831,250 $ (11,750) Under the terms of the agreement, Tiffany will receive the $409,750 cash in exchange for her 50 percent interest in ROF. Tiffany's...
2.   LoWay Exterminators, Inc., is a C-corp with two shareholders. Logan owns a 60% interest with...
2.   LoWay Exterminators, Inc., is a C-corp with two shareholders. Logan owns a 60% interest with a basis of $30,000. Wyatt owns a 40% interest with a 6,000 basis. Accumulated Earnings and Profits of the Corporation as of January 1, 2017 was $10,000 and Earnings and Profits generated during 2017 were 5,000. On December 31, 2017 the C-corp made a non-liquidating distribution in the total amount of $50,000, with $30,000 going to Logan and 20,000 going to Wyatt. The C-corp...
Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions, Inc. (WFI). After liquidating...
Shauna and Danielle decided to liquidate their jointly owned corporation, Woodward Fashions, Inc. (WFI). After liquidating its remaining inventory and paying off its remaining liabilities, WFI had the following tax accounting balance sheet.                                                        FMV         Adjusted Basis          Appreciation             Cash                          $  200,000     $     200,000             Building                           50,000               10,000                    40,000             Land                               150,000               80,000                   70,000             Total                           $  400,000     $     290,000              $    110,000           Under the terms of the agreement, Shauna will receive the $200,000 cash in exchange for her 50 percent interest in WFI. Shauna’s tax basis in her WFI stock is $40,000. Danielle will receive the building and land...
Rex and Felix are the sole shareholders of the Dogs and Cats Corporation (DCC). After several...
Rex and Felix are the sole shareholders of the Dogs and Cats Corporation (DCC). After several years of operations using the accrual method, they decided to liquidate the corporation and operate the business as a partnership. Rex and Felix hired a lawyer to draw up the legal papers to dissolve the corporation, but they need some tax advice from you, their trusted accountant. They are hoping you will find a way for them to liquidate the corporation while minimizing their...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT