P13. Mark and Gill form X corporation with the following consideration:From MarkCashInventoryFrom GillServicesConsideration TransferredBasis to FMVTransferor80,00080,000160,000 320,000020,000Number of SharesReceived402Calculate Realized and recognized gain/loss, basis to each shareholder.Also calculate basis to X corporation for Inventory

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Answered: late basis to X corporation for…

Business

Accounting

late basis to X corporation for Inventory

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter18: Corporations: Organization And Capital Structure

Section: Chapter Questions

Problem 11DQ

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ardner Corp. owns 80% of the voting common stock of Lockhart Co. Lockhart owns 70% of Canning Co. Gardner and Lockhart both use the initial value method to account for their investments. The following information is available from the financial statements and records of the three companies: GardnerCorp. LockhartCo. CanningCo. Separate company net income before investment income $900,000 $650,000 $150,000 Dividend income from investment in subsidiary 250,000 120,000 Deferral of intra-entity gains 110,000 80,000 20,000 Amortization expense related to excess fair value over book value of investment 40,000 25,000 Separate company net income includes intra-entity gains before the consolidating deferral but does not include dividend income from investment in subsidiary. The accrual-based net income of Gardner Corp. is calculated to be