Finch and cardinal as a result of finchs liquidation

Assignment Help Accounting Basics

Reference no: EM13124237

Cardinal Corporation has a basis of $800,000 in the stock of Finch Corporation, a subsidiary in which it owns 90% of all classes of stock. Cardinal has maintained this ownership interest for more than four years. In the current year, Cardinal liquidates Finch Corporation and acquires assets worth $1,300,000 and with an adjusted basis to Finch of $750,000. At the time of liquidation, Finch had E & P of $400,000, and a short-term capital loss carryover of $25,000.

a. What is the recognized gain or loss to Finch and to Cardinal as a result of Finch's liquidation?

b. What basis will Cardinal Corporation have in the assets acquired from Finch Corporation?

c. What happens to Finch's E & P and short-term capital loss carryover?

Reference no: EM13124237

Questions Cloud

How quantity c can be classifed : The quantity C=4 refers to the fact that four of these data values were affirmative. Given this, then how would C=4 be classified?

Groups- isomorphisms and mappings : Groups: Isomorphisms and Mappings, Let G be the additive group of all real numbers, and G' be the group of all positive real numbers under multiplication

Explain the role of the ifrs foundation : Explain the role of the IFRS Foundation and show how the bodies which make up the Foundation contribute to the fulfilment of that role.the answer should include what is IFRS(International Financial Reporting Standards), the role of the IFRS Founda..

What mass in kg of rain falls : if a raindrop weighs 65 mg on average and 5.1x10^5 raindrops fall on a lawn every minute what mass in kg of rain falls in 1.5 hours

Finch and cardinal as a result of finchs liquidation : What is the recognized gain or loss to Finch and to Cardinal as a result of Finch's liquidation?

Calculate the molar enthapy of vaporization of a substance : The molar enthapy of fusion for water is 6.008 kJ/mol. calculate the molar enthapy of vaporization of a substance if 0.652 mol of the substance absorbes 6.411 kJ when it melts.

Calculate sandras and bobs gain or loss : Sandra sold 500 shares of Wren Corporation to Bob, her brother, for its fair market value. She had paid $26,000 for the stock. Calculate Sandra's and Bob's gain or loss.

Find approximate values of mean and standard deviation : Heights of college-aged women are approximately bell-shaped and symmetric, with almost all of them (95%) falling between 58" and 72". Find the approximate values of the mean and standard deviation.

Calculate the overhead controllable variance : the flexible manufacturing overhead budget shows that budgeted costs are $4 variable per direct labor hour and $50,000 fixed. Calculate the overhead controllable variance.

User Account

All Pages