Ac. Eight years ago, SW purchased 1,900 shares of Delta stock. On May 20 of the current year, it sold these shares for $38 per share. In each of the following cases, compute SW’s recognized gain or loss on this sale: 1-SW’s cost basis in the 1,900 shares was $47 per share. It did not purchase any other Delta shares during this year. 2-SW’s cost basis in the 1,900 shares was $47 per share. It purchased 2,100 shares of Delta on May 1 for $40 per share. 3-SW’s cost basis in the 1,900 shares was $47 per share. It purchased 2,100 shares of Delta on June 8 for $40 per share. 4-SW’s cost basis in the 1,900 shares was $32 per share. It purchased 2,100 shares of Delta on June 8 for $40 per share.

Ac. Eight years ago, SW purchased 1,900 shares of Delta stock. On May 20 of the current year, it sold these shares for $38 per share. In each of the following cases, compute SW’s recognized gain or loss on this sale: 1-SW’s cost basis in the 1,900 shares was $47 per share. It did not purchase any other Delta shares during this year. 2-SW’s cost basis in the 1,900 shares was $47 per share. It purchased 2,100 shares of Delta on May 1 for $40 per share. 3-SW’s cost basis in the 1,900 shares was $47 per share. It purchased 2,100 shares of Delta on June 8 for $40 per share. 4-SW’s cost basis in the 1,900 shares was $32 per share. It purchased 2,100 shares of Delta on June 8 for $40 per share.

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter8: Consolidated Tax Returns

Section: Chapter Questions

Problem 36P

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Eight years ago, SW purchased 1,600 shares of Delta stock. On May 20 of the current year, it sold these shares for $62 per share. In each of the following cases, compute SW’s recognized gain or loss on this sale: SW’s cost basis in the 1,600 shares was $68 per share. It did not purchase any other Delta shares during this year. SW’s cost basis in the 1,600 shares was $68 per share. It purchased 1,800 shares of Delta on May 1 for $64 per share. SW’s cost basis in the 1,600 shares was $68 per share. It purchased 1,800 shares of Delta on June 8 for $64 per share. SW’s cost basis in the 1,600 shares was $59 per share. It purchased 1,800 shares of Delta on June 8 for $64 per share.
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Use this problem to answer the next three questions: On January 2, year 1, ABC Company purchased 75% of XYZ's outstanding common stock. On that date, the fair value of the 25% noncontrolling interest was $35,000. During year 1, XYZ had net income of $20,000. Selected balance sheet data at December 31, year 1, is as follows: ABC (Column 1), XYZ (Column 2) During year 1, ABC and XYZ paid cash dividends of $25,000 and $5,000, respectively, to their shareholders. There were no other intercompany transactions. In its December 31, year 1 consolidated statement of retained earnings, what amount should ABC report as dividends paid?
Use this problem to answer the next three questions: On January 2, year 1, ABC Company purchased 75% of XYZ's outstanding common stock. On that date, the fair value of the 25% noncontrolling interest was $35,000. During year 1, XYZ had net income of $20,000. Selected balance sheet data at December 31, year 1, is as follows: ABC (Column 1), XYZ (Column 2) 1. During year 1, ABC and XYZ paid cash dividends of $25,000 and $5,000, respectively, to their shareholders. There were no other intercompany transactions. In its December 31, year 1 consolidated statement of retained earnings, what amount should ABC report as dividends paid? 2. In ABC's December 31, year 1, consolidated balance sheet, what amount should be reported as noncontrolling interest in net assets? 3. In its December 31, year 1 consolidated balance sheet, what amount should ABC report as common stock?