ESSAY. Write your answer in the space provided or on a separate sheet of paper.1) Ms. Linda Udall owns 800 shares of Fordam Inc. that she acquired several years ago at $10 per share. On April 30,2020, she acquires an additional 200 shares at $12 per share. On July 15, 2020, after Fordam releases unexpectedly badsecond quarter results, Ms. Udall sells all 1,000 of her shares at $5 per share. On August 1, 2020, she purchases 200 sharesat $1 per share as she believes the market has overreacted to the bad news. Ms. Udall is still holding the shares at the endof the year. What are the tax consequences of these transactions?2) On July 1, 2020, Lorty InC. sells equipment for S126,000. This equipment had an original cost of $111,000 and a net bookvalue of $93,000. For tax purposes, these assets were in Class 8. The UCC balance in this class on Januarv 1, 2020 was$103,000. There were no other additions or dispositions of Class 8 assets during the taxation vear ending December 31,2020. Indicate the adjustments that would be required to Lorty Inc.'s accounting income in the determination of 2020 NetIncome For Tax Purposes.

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1) Ms. Linda Udall owns 800 shares of Fordam Inc. that she acquired several years ago at $10 per share. On April 30, 2020, she acquires an additional 200 shares at $12 per share. On July 15, 2020, after Fordam releases unexpectedly bad second quarter results, Ms. Udall sells all 1,000 of her shares at $5 per share. On August 1, 2020, she purchases 200 shares at $1 per share as she believes the market has overreacted to the bad news. Ms. Udall is still holding the shares at the end of the vear. What are the tax consequences of these transactions?

1) Ms. Linda Udall owns 800 shares of Fordam Inc. that she acquired several years ago at $10 per share. On April 30, 2020, she acquires an additional 200 shares at $12 per share. On July 15, 2020, after Fordam releases unexpectedly bad second quarter results, Ms. Udall sells all 1,000 of her shares at $5 per share. On August 1, 2020, she purchases 200 shares at $1 per share as she believes the market has overreacted to the bad news. Ms. Udall is still holding the shares at the end of the vear. What are the tax consequences of these transactions?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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