The Double Diamond Ranch has assets of $3,000,000 and liabilities of $8,000,000.The owner of the Double Diamond has decided to make a general assignment for thebenefit of creditors to satisfy a portion of the liabilities. This arrangement willprovideA) Equal payments to all creditors.B) Equal payments to the creditors consenting to the arrangement.C) Pro rata payments to the creditors consenting to the arrangement.D) Pro rata payments to all creditors.Beryl Barkam is starting a new business, Barkam Enterprises, which will be a soleproprietorship selling retail novelties. Barkam recently received a discharge in aChapter 7 bankruptcy case, but certain proved claims were unpaid for lack of funds.Which of the following would be a claim against Barkam?O C) A personal loan by her father made in an attempt to stave off bankruptcy.A) The unpaid amounts owed to secured creditors who received less than thefull amount after resorting to their security interests.B) The unpaid amounts owed to trade suppliers for goods purchased and sold byBarkam in the ordinary course of her prior business.D) The unpaid amount of taxes due to the United States that became due andowing within 3 years preceding bankruptcy. Buyer purchases a new smartphone for her personal enjoyment from ElectronicsDealer. Without the knowledge of Buyer, Dealer has financed the purchase of all itsinventory through Bux Finance Co. It also has given Bux a security interest in theinventory that Bux perfected by filing. On these facts,D) Buyer takes the smartphone free of any unperfected security interests butsubject to any perfected ones.A) Bux loses its security interest because Buyer was a buyer in the ordinarycourse of business.B) Bux may repossess the collateral if Dealer defaults.OC) Bux loses its security interest because the smartphone is a consumer good.

The assets of Double Diamond Ranch are not sufficient to payoff all its liabilities. This is a…

he Double Diamond Ran he owner of the Double Diamond has decided to make a general assignment fc enefit of creditors to satisfy a portion of the liabilities. This arrangement will rovide A) Equal payments to all creditors. OB) Equal payments to the creditors consenting to the arrangement. OC) Pro rata payments to the creditors consenting to the arrangement. diters

he Double Diamond Ran he owner of the Double Diamond has decided to make a general assignment fc enefit of creditors to satisfy a portion of the liabilities. This arrangement will rovide A) Equal payments to all creditors. OB) Equal payments to the creditors consenting to the arrangement. OC) Pro rata payments to the creditors consenting to the arrangement. diters

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter2: Income Tax Concepts

Section: Chapter Questions

Problem 80DC

See similar textbooks

Similar questions

Under the following four independent assumptions, prepare the journal entries for the sale of the land and buildings, allocation of any loss or gain,any deficits, the payment of the liability, and the distributions to the partners if: A) the land and buildings were sold for 180,000, and any partners with a resulting deficits can and do pay the amount of their deficits
Under the following four independent assumptions, prepare the journal entries for the sale of the land and buildings, allocation of any loss or gain,any deficits, the payment of the liability, and the distributions to the partners if: A) the land and buildings were sold for 130,000, and the partners with deficits have no assets other than those invested in the business
Under the following four independent assumptions, prepare the journal entries for the sale of the land and buildings, allocation of any loss or gain,any deficits, the payment of the liability, and the distributions to the partners if: A) The land and buildings were sold for 310,000
On June 1, 2022, AZ invited MG to join him in his business. MG agreed provided that AZ will adjust the accumulated depreciation of his equipment account to a certain amount, and will recognize additional accrued expenses of P40,000. After that, MG is to invest additional pieces of equipment make her interest equal to 45%. If the capital balances of AZ before and after adjustment were 556,00 and 484,000 respectively, what is the effect in the carrying value of the equipment as a result of the admission of MG?
Two construction companies, Harglo and Kalman, are in the construction business. Each owns a tract of land being held for development, but each company would prefer to build on the other's land. Accordingly, they agree to exchange their land, and have the following information: Harglo's Kalman's Land Land Cost and book value $150,000 $100,000Fair value based upon appraisal $200,000 $160,000 The exchange of land was made, and, based on the difference in appraised fair value, Kalman paid $40,000 cash to Harglo. 3. For financial reporting purposes, Harglo would recognize a gain on this exchange in the amount ofa. $0b. $6,000c. $10,000d. $40,000 4. For financial reporting purposes, Kalman would recognize a gain on this exchange…
Immediately prior to the admission of Abbott, the Smith-Jones Partnership determines that equipment that cost $20,000, with accumulated depreciation of $5,000, has a current market value of $12,000. Assuming an asset revaluation account is used, the journal entry to revalue the equipment will include a.a credit to Accumulated Depreciation of $3,000 b.a debit to Asset Revaluation of $3,000 c.a debit to Asset Revaluation of $12,000 d.a credit to Equipment of $3,000
On November 1, 2022, Nelson Corp. purchased land and a building for a combined cost of $2,000,000. Nelson paid $500,000 in cash and financed the remaining $1,500,000 by issuing a three (3) year, 9% installment note. The note will be paid back in three equal payments beginning on November 1, 2023. The Company has determined that the land and building have fair market values of $440,000 and $1,760,000, respectively. Their combined fair market value is $2,200,000. Part A: Prepare the journal entry Nelson should make to record the acquisition of these two assets. Part B: Calculate the amount of each installment payment on the note and complete the amortization below. Round the installment payment amount to the nearest whole dollar. Date Cash Paid Interest Expense Reduction in CV Carrying Value (CV) 11/1/22 11/1/23 11/1/24 11/1/25 Total
On July 1, 2024, Apache Company, a real estate developer, sold a parcel of land to a construction company for $4,128,000. The book value of the land on Apache’s books was $1,720,000. Terms of the sale required a down payment of $172,000 and 23 annual payments of $172,000 plus interest at an appropriate interest rate due on each July 1 beginning in 2025. How much revenue will Apache recognize for the sale (ignoring interest), assuming that it recognizes revenue at the point in time at which it transfers the land to the construction company?
On January 1, 2021 Simon Co. purchased an item of equipment for P600,000, including P50,000 refundable purchase taxes. The purchase price was funded by raising a loan of P605,000. In addition, the entity has to pay P5,000 in loan raising fees to the Bank. The loan is secured against the equipment. In January 2021 the entity incurred costs of P20,000 in transporting the equipment to the entity’s site and P100,000 in installing the equipment at the site. At the end of the equipment’s 10-year useful life the entity is required to dismantle the equipment and restore the building housing the equipment. The present value of the cost of dismantling the equipment and restoring the building is estimated to be P100,000. In January 2021 the entity’s engineer incurred the following costs in modifying the equipment so that it can produce the products manufactured by the entity: • Materials – P55,000 • Labour – P65,000 • Depreciation of plant and equipment used to perform the modifications –…
On July 1, 20X2, Cua, Wicas, and Suico organized a partnership. Wicas contributed cash amounting to P600,000 and Suico contributed cash of P300,000 and machinery with a carrying amount of P250,000, the historical cost of P600,000, and market value of P475,000. Cua, on the other hand, was admitted to the partnership for the services that she will provide. It was stipulated in the Articles of the Partnership that Cua, Wicas, and Suico will share the profit and loss in the ratio of 3:5:2. Moreover, it was also stipulated that when Cua and Wicas become personally insolvent upon winding up, Suico will also absorb the loss of the partnership. Are the stipulations valid? Justify your answer in no more than five (5) sentences.
Peyton sells an office building and the associated land on May 1 of the current year. Under the terms of the sales contract, Peyton is to receive $2,679,000 in cash. The purchaser is to assume Peyton's mortgage of $1,607,400 on the property. To enable the purchaser to obtain adequate financing, Peyton is to pay the $32,148 in points charged by the lender. The broker's commission on the sale is $107,160. What is Peyton's amount realized? The amount realized by Peyton is $_________
On January 1, 2021, Super Balut Co. establishes a branch for an initial cash investment of P10,000,000. The subsequent transactions are as follows: a. On January 3, 2021, the home office acquires land and building to be used by the branch for a total cost of P30,000,000. The branch records the assets in its books. The fair value of the land is P11,000,000, while the fair value of the building is P22,000,000. The building has an estimated useful life of 20 years and no residual value. The company uses the straight-line method of depreciation. b. On February 14, 2021, the home office transfers inventory worth P20,000,000 to the branch. The home office pays freight of P500,000. c. On March 1, 2021, the home office transfers additional inventory worth P5,000,000 to the branch. This time the branch pays the freight of P100,000. d. On March 31, 2021, the branch acquires equipment for P900,000 cash. The equipment will be carried in the home office’s books. The equipment has a useful life of…