Character of the reported profit

Assignment Help Accounting Basics
Reference no: EM13143953

Henry Hawkins owns 20 percent interest in the HI Partnership. On July 1 he sold 100 shares of stock of IPR Corporation to the partnership for $10,000, its fair market value. The stock had cost him $5,000 10 months prior to the sale.

Assume that the HI partnership in the preceding problem held the IPR stock for three months and on October 1 sold it for $15,000 to Isaac Stanley, the 80 percent partner and a real estate broker. How much profit must Henry Report on this partnership sale currently? What is the character of the reported profit? How would your answer be different he were a dealer in securities?

Reference no: EM13143953

Questions Cloud

Explain most important alkaloid derived from cinchona bark : Quinine (C20H24N2O2) is the most important alkaloid derived from cinchona bark. It is used as an antimalarial drug.
Calculate the p-value for population of subscribers : Find that 116 plan to renew their subscriptions. Use (a=0.01). p = the population of subscribers to Golf Illustrated who renew. Calculate the p-value.
What is the initial concentration of the acid : If 358 mL of H2SO4 is neutralized with 60.0 mL of 1.50 M NaOH, what is the initial concentration of the acid?
Contribution margin in the campus store : The contribution margin in the campus store is $110,000. Direct fixed costs are $90,000 in the downtown store and $93,000 in the campus location. How much are total variable costs?
Character of the reported profit : How much profit must Henry Report on this partnership sale currently? What is the character of the reported profit? How would your answer be different he were a dealer in securities?
How many moles of oh- are present : 0.2 M HCl is used to neutralize 20 mL of 0.35 M NaOH. a. How many moles of OH- are present?
How many chromatids are present in a fly cell : How many chromatids are present in a fly cell in.
What two values all blood pressures lie : Suppose you have a set of blood pressures with a mean of 80 diastolic and standard deviation of 5 points. assuming a normal distributions of blood pressures, what two values should 95% of all blood pressures lie? show work.
Activity variance for vehicle operating cost : Portsche Snow Removal's cost formula for its vehicle operating cost is $2,310 per month plus $317 per snow-day. For the month of November, the company planned for activity of 18 snow-days, but the actual level of activity was 20 snow-days. The act..

Reviews

Write a Review

Accounting Basics Questions & Answers

  Prepare a tax memo indicating

Friedman, Inc., an S corporation, holds some highly appreciated land and inventory, and some marketable securities that have declined in value. it anticipates a sale of these assets and a complete liquidation of the company over the next two years..

  What amount of the refund

What amount of the refund, if any, should Grace include in her gross income if last year her total itemized deductions exceeded the standard deduction by $350?

  Accounting for pensions basics

In the United States, accounting for pensions has received a great deal of attention. In other countries, pension accounting is given much less attention. In one page, examine the reasons that would explain why pension accounting is given much les..

  Warehouse with an adjusted basis

Latisha owns a warehouse with an adjusted basis of $112,000. She exchanges it for a strip mall building worth $150,000. Which of the following statements is correct?

  Classifying items into variable and fixed costs

Which of the following is an example of a variable cost?

  Basics of income under absorption costing

There was no beginning inventory at 1/1/09. Production was 20 units per year in 2009-2011. Sales was 20 units in 2009, 16 units in 2010, and 24 units in 2011. Income under absorption costing for 2010 is:

  Determination of taxable income

Brown Corporation, an accrual basis corporation, has taxable income of $150,000 in the current year. Included in its determination of taxable income are the following transactions.

  Validate why revenue is often recognized as earned

Create a situation or scenario in which it may be appropriate to recognize revenue as the productive activity takes place. State whether or not there are any other times appropriate for recognizing revenue. Provide a rationale with your response.

  Use of a process costing system

A single product in one department and uses a process costing system. At the start of May, there were 10,000 units in process that were 100 percent complete with respect to direct material and 60 percent complete with respect to conversion costs (..

  Journal entry to record the change in accounting principle

Wertz Corporation decided at the beginning of 2010 to change from the completed-contract method to the percentage-of-completion method for financial reporting purposes.

  Computing the percentage of completion

An error was made by ABC Company in computing the percentage of completion of the current year's ending Work-in-Process Inventory. The error resulted in the assignment of a lower percentage of completion to each component of the inventory than act..

  Accounting issues-ifrs and us gaap

Identify three major accounting issues on which IFRS and US GAAP currently differ. For each, outline briefly the nature of the divergence, and discuss the potential impact if the IFRS position is adopted in the US.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd