Problem related to stock redemption

Assignment Help Accounting Basics
Reference no: EM13145499

Kingbird Corporation ( E & P of $800,000) has 1,000 shares of stock outstanding. That stock is held by Amata (550 shares) and Esteban (450 shares), who are unrelated individuals. Kingbird redeems 200 of Amata's shares for $1000 per share. Amata paid $300 per share for her stock nine years ago. Which of the following statements is correct with respect to the stock redemption?

A. Amata has dividend income of $200,000

B. Amata has a long-term capital gain of $140,000

C. Amata's basis in her remaining 350 shares is $60,000

D. Kingbird reduces its E & P by $200,000

E. None

Reference no: EM13145499

Questions Cloud

Compute the final celsius temperature of hydrogen : Calculate the final Celsius temperature of hydrogen chloride gas if 0.500 L at 35°C and 0.950 atm is heated
What is the limiting reactant : 10.0 grams of sodium bicarbonate reacts with 50.0 mL of 2 M acetic acid, what is the limiting reactant? what reactant is in excess, and by how much? what volumeof carbon dioxide gas would form?
What exactly is a cytoplasmic receptor : What exactly is a cytoplasmic receptor and why is a small nonpolar molecule the most likely candidate to have a cytoplasmic receptor?
Find support the claim that defective rate exceeds : Uuse a level of significance of a =0.01 to test to see if you have sufficient evidence to support the claim that the defective rate exceeds 3%.
Problem related to stock redemption : Kingbird redeems 200 of Amata's shares for $1000 per share. Amata paid $300 per share for her stock nine years ago. Which of the following statements is correct with respect to the stock redemption?
What are the predicted numbers of offspring : What would be the predicted numbers of offspring with these four genotypes if the parental generation had been AAbb and aaBB instead of AABB and aabb?
Relationship between marginal revenue and elasticity : The relationship between marginal revenue and elasticity is when demand is elastic marginal revenue is positive and when demand is inelastic marginal revenue is negative
Define what is the final celsius temperature of nitric oxide : What is the final Celsius temperature if 4.55 L of nitric oxide gas at 35°C is cooled until the volume reaches 1.00 L
Estimate the sampling distribution of y mean : You can estimate the sampling distribution of y mean (y with a - on top) by repeatedly taking samples of size n with replacement from the list of sample values.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Determining effective annual interest rate of loan

You aare considering buying a new $25,000 car. The car dealer offers you a 13.6% loan with 30 equal monthly payments. Upon the questioning the dealer, you find that this unusual loan has "add-on" interest-What is the approximate effective annual in..

  Assessing workplace behavior

What have you learned about how you work as an individual? How have you changed your behaviour or approach to the workplace as a result of what you have learned? How has this helped improve work outputs or business results in your area?

  Dividends and net income

Use the following information and the percent-of-sales method to answer questions. For consistency with the Answer selections provided, please round your forecast percentages to two decimals.)

  Discuss the actions you would employ as a cpa to prevent

identify and evaluate the issues related to the internally created software for HouseRaising. Discuss the potential problems related to the capitalization of internally created software and the requirements for capitalization under GAAP.

  How operating income be affected

If Hoffman accepts the special order, the company would not have to pay its salespeople their normal commission of $2 per unit, but the company would incur a shipping cost of $3 per unit on the items in the special order. If Hoffman accepts the sp..

  Description of business analysis

Compare and contrast how production analysis is performed and capable to evaluate production situations using economy of scale, elasticity and other analytic tools.

  Preparing separate journal entries for manufacturing cost

During the first year of operations,Shapiro tool ccumulated the following manufacturing costs: a) Raw materials purchased on account $ 8000 b) Factory labor accured 6000

  Holding sales constant

By how much must the assets be reduced to bring the TATO to the industry average, holding sales constant?

  Units conversion costs for the current period

Barnes and Miller manufacturing is trying to determine the equivalent units for coversion costs with 3000 units of ending work in process at 80% completion and 14000 physical units. there are no beginning units in the department.conversion costs o..

  Omegas taxable income for the current year

What is Omega's taxable income for the current year, assuming qualified production activities income is $20,000?

  Comparison of speeds

A new computer is purchased that can do the same job in 5 days. How long would it take to do the job with both computers working on it?

  Computation of payroll and related tax expense

An employee received a paycheck from her employer in the amount of $776.35. The pay-check stub indicated that in calculating her $776.35 net pay, $139.75 had been withheld for federal income tax, $34.25 for state income tax, and $74. 65 for FICA. ..

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