Under a plan of complete liquidation, Coast Corporation distributes land with a $300,000 adjusted basis and a $400,000 FMV to William, a 25% shareholder. William has a $200,000 basis in his Coast stock. The land is inventory in the hands of Coast Corporation. Coast Corporation must recognize
A) no gain.
B) $100,000 of ordinary income.
C) $100,000 of long-term capital gain.
D) $200,000 of ordinary income.
B) $100,000 of ordinary income.
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Which of the following is a disadvantage of a sole proprietorship?
A. Excessive regulation. B. Unlimited liability. C. Double taxation. D. Entrenched management.
Martin Company currently manufactures all component parts used in the manufacturing of various hand tools. The Extruding Division produces a steel handle used in three different tools. The budget for these handles is 120,000 units with the following unit cost: Direct material$0.60 Direct labor 0.40 Variable overhead 0.10 Fixed overhead 0.20 Total unit cost$1.30 The Polishing Division purchases 20,000 handles from the Extruding Division and completes the hand tools. An outside supplier, Venture Steel, has offered to supply 20,000 units of the handle to the Polishing Division for $1.25 per unit. The Extruding Division currently has idle capacity that cannot be used.If Martin Company would like to develop a range of transfer prices, what would be the maximum transfer price that
the Polishing Division would be willing to pay the Extruding Division? A. $1.30. B. $1.25. C. $1.00. D. $1.10.
The two primary components of stockholders' equity include common stock and revenue.
Answer the following statement true (T) or false (F)
Which of the following is an advantage of floating rate bonds to investors?
A) They allow for locking in a multiplier of the initial investment. B) Their prices tend to be highly stable regardless of interest rate changes. C) They are sold at a deep discount. D) All of these options are correct.