Outstanding stock of crane corporation

Assignment Help Accounting Basics
Reference no: EM13121456

Leon owns all six hundred (600) shares of the outstanding stock of Crane Corporation (Earnings And Profits (E&P) of $1,000,000). Leon had acquired the stock ten (10) years ago for $450,000. Crane Corporation, which has several trades or businesses that it has developed and operated for more than five (5) years, sells one (1) of those trades or businesses and, in a transaction qualifying as a partial liquidation [under Section 302(b)(4)], redeems two hundred (200) shares of Leon's stock for $500,000. As a result of this transaction, Leon must recognize:

(a) $500,000 Long-Term Capital Gain.

(b) $500,000 Dividend Income.

(c) $350,000 Long-Term Capital Gain.

(d) $350,000 Dividend Income.

Reference no: EM13121456

Questions Cloud

Level of equilibrium income in the economy : What is the level of equilibrium income in the economy and what is the value of the marginal propensity to expend?
Probability statistics combination application word problem : In a marketing survey, consumers are asked to give their first three choices, of 9 different drinks. In how many different ways can they indicate their choices? Probability Statistics Combination Application Word Problem
Illustrate what modification you would make to guideline : Formulate a response that addresses whether or not you agree more guidance is needed and why; what you support and do not support about the proposal and why; and illustrate what modification you would make to the guidelines.
Which of the following is true for endergonic reactions : Which of the following is true for endergonic reactions?
Outstanding stock of crane corporation : Leon owns all six hundred (600) shares of the outstanding stock of Crane Corporation (Earnings And Profits (E&P) of $1,000,000). Leon had acquired the stock ten (10) years ago for $450,000.
Which of the following best characterizes membrane structure : Which of the following best characterizes membrane structure.
What is the maximum yield of atp : A yeast cell utilizes 8 molecules or glucose for energy production. No oxygen is available. What is the maximum yield of ATP?
Greatest common factors word problem : Happy Hector and Party Paul are each having a catered party at Fun Factory. Hector's party is in the hall and Paul's party is on the Patio.
What are two ways such reactions can be driven forward : Note that that some reactions that take place in cells have a positive delta G'. What are two ways such reactions can be "driven forward"?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Determining firm gross profit

Your firm has the following income statement items; sales of 50,250,000; income tax of 1,744,000.00; operating expenses of 10,115,000; cost of goods sold of 35,025000 and interest expense of 750,000. What is the amount of the firm's gross profit.

  Prepare the manufacturing staffs calculations

Prepare the manufacturing staffs calculations, In the fIrst set of calculations, the staff used a discount rate of 20 percent, a fIve-year time horizon, and ignored taxes and terminal value. What is the relative attractiveness of these three alternat..

  Computing stock and portfolio beta

There are two stocks, stock A and stock B. The price of stock A today is $70. The price of stock A next year will be $50 if the economy is in recession, $80 if the economy is normal and $95 if the economy is expanding.

  Determining the net present value of project

ynga is a software developer and is considering a project that requires an initial investment of $200,000-The Net Present Value of the project is approximately

  What is the apparent variable cost per employee paid

Cost Behavior when costs are semivariable: Data from the payroll department of Dominguez Company for the past two months follow: What is the apparent variable cost per employee paid?

  Computing pre-determined overhead rate

Wahr Corporation bases its predetermined overhead rate on the estimated labor hours for the upcoming year. At the beginning of the most recently completed year

  How much accumulated depreciation would there be

Your company just bought an asset for $200,000 with an estimated useful life of 5 yrs, and a salvage value of $10,000. The Controller asks you to use a depreciation method that would produce the highest charge against income after three years. Wha..

  Global business language evidence implications

Accounting is becoming a global business language. Provide some evidence of this assertion. What are some of the implications of this trend?

  Audit-cobit methodology

How does an audit performed using CobiT methodology differ from an audit that doesn't?

  Identify problems for capital project

H2O Innovations: Identify a new capital project. Describe the project and problems you are going to have in estimating the cash flow that might be emanating from the initial investment and problems in getting it funded. Issues might be:

  Tax savings from special tax treatment

Daniel figures that he has loss of $60,000 on each stock. If Daniel's marginal tax rate is 35 percent and he has $120,000 of other capital gains (taxed at 15 percent), what is tax savings from the special tax treatment?

  Essay question international relations handout

How has the 2007-09 Global Financial Crisis affected the procedures of global economic governance?

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