Assets Basis to Dove Fair Market Value Cash $80,000 $80,000 Accounts receivable 240,000 Equipment (cost $180,000; depreciation 120,000 320,000 previously claimed $60,000) Building (straight-line depreciation) 160,000 400,000 Land 40,000 160,000 Total $400,000 $1,200,000 Liabilities and Stockholders' Equity Liabilities: Accounts payable-trade $120,000 Notes payable-bank 360,000 Stockholders' equity: Common stock 720,000 Total $1,200,000 What are the tax consequences of the incorporation of the business to Cynthia and to Dove Corporation? If an an amount is zero, enter "о". Cynthia: Cynthia recognizes $ gain on the transfer. Her basis for the stock in Dove Corporation is $ because the cash basis payables treated as liabilities for basis calculation purposes. Dove Corporation: Dove Corporation has a basis of $ in the assets received from Cynthia.

Assets Basis to Dove Fair Market Value Cash $80,000 $80,000 Accounts receivable 240,000 Equipment (cost $180,000; depreciation 120,000 320,000 previously claimed $60,000) Building (straight-line depreciation) 160,000 400,000 Land 40,000 160,000 Total $400,000 $1,200,000 Liabilities and Stockholders' Equity Liabilities: Accounts payable-trade $120,000 Notes payable-bank 360,000 Stockholders' equity: Common stock 720,000 Total $1,200,000 What are the tax consequences of the incorporation of the business to Cynthia and to Dove Corporation? If an an amount is zero, enter "о". Cynthia: Cynthia recognizes $ gain on the transfer. Her basis for the stock in Dove Corporation is $ because the cash basis payables treated as liabilities for basis calculation purposes. Dove Corporation: Dove Corporation has a basis of $ in the assets received from Cynthia.

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter8: Investing Activities

Section: Chapter Questions

Problem 1.3AIC: Estimate the average total estimated useful life of depreciable property, plant, and equipment....

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