Martin operates a law practice as a sole proprietorship using the cash method of accounting. Martin incorporates the law practice and transfers the following items to a new, solely owned corporation.?Adjusted BasisFMVCashEquipmentAccounts receivableAccounts payable (deductible expenses)Note payable (on equipment)$10,000 80,000 0 0 50,000$ 10,000 100,000 120,000 60,000 50,000Martin must recognize a gain of ________ and has a stock basis of ________:
A. $0; $40,000
B. $20,000; $30,000
C. $20,000; $40,000
D. $0; $30,000
Answer: A
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A truck that cost $12,000 and on which $9,000 of accumulated depreciation has been recorded was disposed of on January 1 . If the truck was discarded as having no value, the entry to record this event is:
a. Truck 12,000 Accumulated Depreciation— Truck 12,000 b. Truck 9,000 Accumulated Depreciation— Truck 9,000 c. Accumulated Depreciation— Truck 12,000 Truck 9,000 Gain on Sale of Equipment 3,000 d. Accumulated Depreciation— Truck 9,000 Loss on Sale of Truck 3,000 Truck 12,000
Trading debt securities are reported as long-term assets.
Answer the following statement true (T) or false (F)
Of the following actions, the one not required to make a will valid is
a. signing the will. b. witnessing the will. c. reading the will to a witness. d. including an attestation clause.
Which of the following is the most appropriate term to use when describing management's duty to its shareholders?
A. official duty B. legal duty C. fiduciary duty D. statutory duty