stock plus land with a 5,848. Auto Corp's la 160 prior to the exch s had a basis of $2,19:
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- Assume that in the first step of the reorganization, Auto Corp. will exchange $6,071,963 worth of Auto Corp. stock plus land with a fair market value of $2,276,714 for all of Battery Corp.'s assets. Auto Corp's land had a basis of $5,761 prior to the exchange. Battery Corp.'s assets had a basis of $1,296,616 prior to the exchange. Assume that in the second step of the reorganization, Battery Corp. will distribute the $6,071,963 in Auto Corp. stock plus the land that it just acquired from Auto Corp. to Battery Corp.'s sole shareholder, Sydney, in exchange for all of Sydney's shares of Battery Corp. stock. Prior to the exchange, Sydney's basis in her shares of Battery Corp. stock was $3,863,473. After the exchange, Sydney will now be a shareholder of Auto Corp. instead of Battery Corp. What amount of gain/loss will Battery Corp. recognize as a result of the reorganization?In a qualifying reorganization, Cato Corporation exchanges $8,005,000 worth of stock and property valued at $3,202,000 ($1,601,000 basis) for all of Firestar Corporation's assets, which have a value of $11,207,000 and a $2,241,400 basis. Firestar distributes the property received from Cato. The exchange meets all Code requirements. If an amount is zero, enter "0". a. What is Cato's recognized gain/loss from the reorganization? Cato recognizes a gain of $ b. What is Firestar's recognized gain/loss from the reorganization? Firestar recognizes no gain or loss of $Accounting Assume that in the first step of the reorganization, Auto Corp. will exchange $6,071,963 worth of Auto Corp. stock plus land with a fair market value of $2,276,714 for all of Battery Corp's assets. Auto Corp's land had a basis of $5,761 prior to the exchange. Battery Corp.'s assets had a basis of $1,296,616 prior to the exchange. Assume that in the second step of the reorganization, Battery Corp. will distribute the $6,071,963 in Auto Corp. stock plus the land that it just acquired from Auto Corp. to Battery Corp.'s sole shareholder, Sydney, in exchange for all of Sydney's shares of Battery Corp. stock. Prior to the exchange, Sydney's basis in her shares of Battery Corp. stock was $3,863,473. After the exchange, Sydney will now be a shareholder of Auto Corp. instead of Battery Corp. What amount of gain/loss will Battery Corp. recognize as a result of the reorganization?
- In a qualifying reorganization, Cato Corporation exchanges $1,200,000 worth of stock and property valued at $500,000 ($245,000 basis) for all of Firestar Cor- poration’s assets, which have a value of $1,700,000 and a $500,000 basis. Firestar dis- tributes the property received from Cato. The exchange meets the § 368 requirements. What is Cato’s recognized gain/loss from the reorganization? What is Firestar’s recognized gain/loss from the reorganization?Assuming that the quasi reorganization shall be accomplished as follows: Property, plant and equipment are to be reduced to their fair market value of P800,000. Inventories are to be written down by P50,000. • Unaccrued obligation shall be recognized at P150,000. • The par value of ordinary Shares will be reduced to P5. 1. What is the balance of the retained earnings account as of 31 December 2019? Assuming that the quasi reorganization shall be accomplished as follows: Property, plant and equipment are to be reduced to their fair market value of P800,000. Inventories are to be written down by P50,000. • Unaccrued obligation shall be recognized at P150,000. • The par value of ordinary Shares will be reduced to P5. 2. What is the balance of the retained earnings account as of 31 December 2019?If PROMDI Co., a new company would acquire the net assets of CARDO Co and SYANO Co. PROMDI Co will be issuing 30,000 shares to CARDO and 12,000 shares to SYANO. The following is the balance sheet of PROMDI Co, followed by the fair values and additional unpaid costs incurred by PROMDI in the acquisition: REQUIREMENTS: Consolidated Equity at the date of acquisition
- 2a. Alpha Corporation owns assets valued at $400,000 and liabilities of $100,000. Beta Corporation transfers $160,000 of its voting stock and $40,000 in cash for 75% of Alpha's assets and all of its liabilities. Alpha distributes its remaining assets and the Beta stock to its shareholders. Alpha then liquidates. Is this a taxable transaction? If this is not a taxable transaction, then identify the type of reorganization. b. Beta Corporation owns assets valued at $1,500,000 with liabilities of $700,000, and Alpha holds assets valued at $350,000 with liabilities of $150,000. Beta transfers 200,000 shares of stock and $50,000 cash, and it accepts $100,000 of Alpha's liabilities, in exchange for all of the Alpha assets. Alpha distributes the Beta stock to its shareholders for their Alpha stock and then ceases to exist. Is this a taxable transaction? If this is not a taxable transaction, then identify the type of reorganization. c. Alpha Corporation obtained 200,000 shares of Beta…On September 18, 2020, OPQ Co. acquired all of TUV Inc.’s P400,000 identifiable assets and P100,000 liabilities. Book values of TUV’s assets and liabilities equal their fair values except for an overvalued Building. As a consideration, OPQ Co. issued its own shares of stock with a market value of P320,000. The merger resulted into P140,000 goodwill. Assuming OPQ Co. had P1,000,000 total assets prior to the combination, compute the total assets immediately after the merger.Rivendell Corporation and Foster Company merged as of January 1, 2019. To effect the merger, Rivendell paid finder's fees of $40,000, legal fees of $13,000, audit fees related to the stock issuance of $10,000, stock registration fees of $5,000, and stock listing application fees of $4,000. Based on the preceding information, under the acquisition method, what amount relating to the business combination would be expensed Select one: a. 53,000 b. 72,000 c. 19,000 d. 63,000
- Determine whether the following transactions are taxable in the current year, applying the corporate reorganization rules. If a transaction is not taxable, indicate what type of reorganization is affected, if any. Alpha Corporation owns assets valued at $400,000 and liabilities of $100,000. Beta Corporation transfers $160,000 of its voting stock and $40,000 in cash for 75% of Alpha’s assets and all of its liabilities. Alpha distributes its remaining assets and the Beta stock to its shareholders. Alpha then liquidates. Beta Corporation owns assets valued at $1,500,000 with liabilities of $700,000, and Alpha holds assets valued at $350,000 with liabilities of $150,000. Beta transfers 200,000 shares of stock and $50,000 cash, and it accepts $100,000 of Alpha’s liabilities, in exchange for all of the Alpha assets. Alpha distributes the Beta stock to its shareholders for their Alpha stock and then ceases to exist. Alpha Corporation obtained 200,000 shares of Beta Corporation’s stock…On January 1, 2024, Morey, Incorporated, exchanged $180,575 for 25 percent of Amsterdam Corporation. Morey appropriately applied the equity method to this investment. At January 1, the book values of Amsterdam’s assets and liabilities approximated their fair values. On June 30, 2024, Morey paid $605,500 for an additional 70 percent of Amsterdam, thus increasing its overall ownership to 95 percent. The price paid for the 70 percent acquisition was proportionate to Amsterdam’s total fair value. At June 30, the carrying amounts of Amsterdam’s assets and liabilities approximated their fair values. Any remaining excess fair value was attributed to goodwill. Amsterdam reports the following amounts at December 31, 2024 (credit balances shown in parentheses): Revenues $ (291,000) Expenses 186,000 Retained earnings, January 1 (237,300) Dividends declared, October 1 10,000 Common stock (500,000) Amsterdam’s revenue and expenses were distributed evenly throughout the year, and no…DEF company acquired the assets and assumed liabilities of GHI Company on January 1, 2022 by paying P3,000,000 and issuing its own ordinary shares. The comparison of the acquirer’s balance sheet before and after business combination transaction is as follows: Balance sheet before Acquisition Balance Sheet after Acquisition Total Assets 13,545,000 17,595,000 Total Liabilities 3,760,000 ? Total SHE 9,785,000 ? The fair value of the identifiable net asset of the acquiree is P4,835,000 and the book value of acquiree’s liabilities amounting to P1,300,000 is lower compared to its fair value by P350,000. DEF company paid acquisition related costs amounting to P50,000. What is the fair market value of the ordinary shares issued by the acquirer? a. 2,500,000 b. 2,400,000 c. 2,480,000 d. 2,450,000