Please don't provide answer in image format thank you Hi guys, I need help with these question. Thank you so much On January 1, 2022, Sam and Sara formed a new business entity called Nice Brother Co. Sam contributes $250,000 cash and Sara contributes land with an adjusted basis of $300,000 and fair market value of $492,000 with a mortgage of $258,000 that is assumed by Nice Brother Co. Assume the following operating results for 2022: Sales $ 1,500,000 Interest income – from a bank $ 3,200 Royalties $ 60,000 Loss from sale of investment $ (7,000) Cost of goods sold $ 622,000 Salaries $ 450,000 Rent $ 144,000 Maintenance $ 24,000 Utilities $ 58,000 EPA penalty $ 1,000 Depreciation ? Charitable contribution $ 30,000 Payment to Sam for retirement* $ 15,000 *payment considered a guaranteed payment if the entity is a partnership The company’s only depreciable asset is equipment (useful life of 5 years) which will be purchased in 2022 for $100,000. The only asset sold was an investment purchased on 2/2/22 for $28,000 and sold on 11/4/22 for $21,000 What is Sam’s basis in the entity at the end of 2022 if the entity is a C Corporation, Partnership and S Corporation?
Please don't provide answer in image format thank you Hi guys, I need help with these question. Thank you so much On January 1, 2022, Sam and Sara formed a new business entity called Nice Brother Co. Sam contributes $250,000 cash and Sara contributes land with an adjusted basis of $300,000 and fair market value of $492,000 with a mortgage of $258,000 that is assumed by Nice Brother Co. Assume the following operating results for 2022: Sales $ 1,500,000 Interest income – from a bank $ 3,200 Royalties $ 60,000 Loss from sale of investment $ (7,000) Cost of goods sold $ 622,000 Salaries $ 450,000 Rent $ 144,000 Maintenance $ 24,000 Utilities $ 58,000 EPA penalty $ 1,000 Depreciation ? Charitable contribution $ 30,000 Payment to Sam for retirement* $ 15,000 *payment considered a guaranteed payment if the entity is a partnership The company’s only depreciable asset is equipment (useful life of 5 years) which will be purchased in 2022 for $100,000. The only asset sold was an investment purchased on 2/2/22 for $28,000 and sold on 11/4/22 for $21,000 What is Sam’s basis in the entity at the end of 2022 if the entity is a C Corporation, Partnership and S Corporation?
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter11: Stockholders' Equity
Section: Chapter Questions
Problem 11.10P
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Please don't provide answer in image format thank you
Hi guys, I need help with these question. Thank you so much
On January 1, 2022, Sam and Sara formed a new business entity called Nice Brother Co. Sam contributes $250,000 cash and Sara contributes land with an adjusted basis of $300,000 and fair market value of $492,000 with a mortgage of $258,000 that is assumed by Nice Brother Co.
Assume the following operating results for 2022:
| Sales | $ 1,500,000 |
| Interest income – from a bank | $ 3,200 |
| Royalties | $ 60,000 |
| Loss from sale of investment | $ (7,000) |
| Cost of goods sold | $ 622,000 |
| Salaries | $ 450,000 |
| Rent | $ 144,000 |
| Maintenance | $ 24,000 |
| Utilities | $ 58,000 |
| EPA penalty | $ 1,000 |
| ? | |
| Charitable contribution | $ 30,000 |
| Payment to Sam for retirement* | $ 15,000 |
*payment considered a guaranteed payment if the entity is a
The company’s only depreciable asset is equipment (useful life of 5 years) which will be purchased in 2022 for $100,000.
The only asset sold was an investment purchased on 2/2/22 for $28,000 and sold on 11/4/22 for $21,000
- What is Sam’s basis in the entity at the end of 2022 if the entity is a C Corporation, Partnership and S Corporation?
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