da. Hopkin decides to make a section 338 election on its purchase. Hopkin paid $600,000 in cash for Johns, Inc. At the date of the purchase, Johns had rental payments due of $40,000, accounts payable of $28,000, and other debts of $12,000. The tax basis of all of Jonhs's assets was $95,000. What will be the sales price of old Johns's assets and the new basis in the assets to new Johns (rounded to nearest 1,000)? Use only the federal corporate tax rate of 21%.
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Hopkin Corpo has recently purchased all of the stock of Johns, Inc. in April 2018. Johns only does business in Nevada. Hopkin decides to make a section 338 election on its purchase. Hopkin paid $600,000 in cash for Johns, Inc. At the date of the purchase, Johns had rental payments due of $40,000, accounts payable of $28,000, and other debts of $12,000. The tax basis of all of Jonhs's assets was $95,000. What will be the sales price of old Johns's assets and the new basis in the assets to new Johns (rounded to nearest 1,000)? Use only the federal corporate tax rate of 21%.
A. $740,000 and $740,000
B. $740,000 and $680,000
C. $836,000 and $836,00
Tax Liability is the different company's taxable income as shown in the income statement and in income tax returns. It is also be understood as tax liability which has been deferred to the future because of accounting difference and the company will pay them afterwards.
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