MINDTAP BUSINESS LAW FOR MANN/ROBERTS S
17th Edition
ISBN: 9781337094498
Author: Roberts
Publisher: IACCENGAGE
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Chapter 7, Problem 22CP
Summary Introduction
To discuss: The tort offers the best likelihood of recovery and what pro golf would have to prove to recover.
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On January 1, 2019, Aspen Company acquired 80 percent of Birch Company's voting stock for $392,000. Birch reported a $355,000 book value, and the fair value of the noncontrolling interest was $98,000 on that date. Then, on January 1, 2020, Birch acquired 80 percent of Cedar Company for $228,000 when Cedar had a $204,000 book value and the 20 percent noncontrolling interest was valued at $57,000. In each acquisition, the subsidiary's excess acquisition-date fair over book value was assigned to a trade name with a 30-year remaining life.
These companies report the following financial information. Investment income figures are not included.
2019
2020
2021
Sales:
Aspen Company
$
500,000
$
750,000
$
825,000
Birch Company
251,500
343,250
627,900
Cedar Company
Not available
164,900
246,800
Expenses:
Aspen Company
$
465,000
$
567,500
$
632,500
Birch Company
199,000
282,000
555,000
Cedar Company
Not available
152,000…
“I think I’m in trouble,” Elvira confided to her husband, Curtis. “I had a customer in today who complained that one of my clerks had discriminated against her and that she was going to sue. I discovered that this same clerk had designed an elaborate scheme to embezzle from me and I intend to press criminal charges. Also, my landlord has stating that the remodeling I did voids my rental agreement and he wants me to vacate in 2 months. I looked at the contract and I’m 99% sure he’s wrong, but I’m no lawyer. I need some legal help!”
A 72,000 square foot multi-tenant retail property with an Equinox gym and a Wendy’s restaurant in Columbus, Ohio was recently sold for $7,200,000. Selling costs, including a brokerage fee, totaled five percent of the purchase price. The mortgage loan balance at the time of sale was $3,760,000. The property was purchased eight years earlier for $4,200,000, and annual depreciation deductions of $120,000 were taken each year for tax purposes. If the combined effective federal and state income tax rates on capital gains and tax depreciation recapture is 30%, what was the after-tax cash flow from the sale of the property?
a. $2,288,000
b. $2,252,000
c. $2,540,000
d. $2,000,000
Chapter 7 Solutions
MINDTAP BUSINESS LAW FOR MANN/ROBERTS S
Ch. 7 - Prob. 1COCh. 7 - Prob. 2COCh. 7 - Prob. 3COCh. 7 - Prob. 4COCh. 7 - Prob. 5COCh. 7 - Prob. 1QCh. 7 - Prob. 2QCh. 7 - Prob. 3QCh. 7 - Prob. 4QCh. 7 - Prob. 5Q
Ch. 7 - Prob. 6QCh. 7 - Prob. 7QCh. 7 - Prob. 8QCh. 7 - Prob. 9QCh. 7 - Prob. 10QCh. 7 - Prob. 11CPCh. 7 - Prob. 12CPCh. 7 - Prob. 13CPCh. 7 - Prob. 14CPCh. 7 - Prob. 15CPCh. 7 - Prob. 16CPCh. 7 - Prob. 17CPCh. 7 - Prob. 18CPCh. 7 - Prob. 19CPCh. 7 - Prob. 20CPCh. 7 - Prob. 21CPCh. 7 - Prob. 22CPCh. 7 - Prob. 1TSCh. 7 - Prob. 2TSCh. 7 - Prob. 3TS
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