# Sayid is the sole shareholder of an S corporation in Hattiesburg, Mississippi. At a time when his stock basis is \$20,000, the corporation distributes appreciated property worth \$40,000 (basis of \$20,000). There is no built-in gain. Sayid's taxable gain is:

\$20,000

Explanation:

The computation of the taxable gain is shown below:

The corporate gain is

= \$40,000 - \$20,000

= \$20,000

Now the stock basis is increased i.e.

= \$20,000 + \$20,000

= \$40.000

Now the stock basis decreased to zero i.e.

= \$40,000 - \$40,000

= \$0

So, here the taxable gain is of \$20,000

## Related Questions

Lacy's Linen Mart uses the average cost retail method to estimate inventories. Data for the first six months of 2021 include: beginning inventory at cost and retail were \$64,500 and \$123,000, net purchases at cost and retail were \$315,000 and \$483,000, and sales during the first six months totaled \$493,000. The estimated inventory at June 30, 2021, would be:

Best estimate for inventory =\$70,764.85

Explanation:

The closing inventory value at retail

= (Opening inventory + Purchases - sales)  all in retail prices

= \$123,000 +  \$483,000 - 493,000.

= 113000

Closing inventory value at cost

=113,000 ×  (64,500 + 315,000)/(123,000 +  \$483,000)

=70,764.85

Best estimate for inventory =\$70,764.85

Which of the following measures the cash available to the company's investors? a. operating cash flow b. free cash flow c. net cash flow d. investing cash flow

Free cashflow

Explanation:

Free cashflow entails that cash a company generates after it has accounted for cash outflows to support operations and maintain its capital assets. It also measures the cash available to the company's investors and creditors after accounting for its operational cost.

The current account is best defined as:A. the account that tracks the flow of domestic money into and out of foreign assets and the flow of foreign money into and out of domestic assets.
B. the account that includes transactions like imports and exports, income earned by Americans abroad, and net transfers to other countries.
C. the national income account that tracks all purchases made by businesses within the last six months.

The account that includes transactions like imports and exports, income earned by Americans abroad, and net transfers to other countries.

Explanation:

A current account can be defined as an account that record the different transactions a country carries out with another country. A current account comprises of net primary income, earnings from foreign investors that have occurred within a particular period of time.

Almost all countries are involved in trading of goods and services with another country, a current account helps to evaluate the manner in which a particular country traded their different goods with foreign markets.There tends to be a postive balance of a country exports more goods than it imports.

Sterling Company paid \$1,200 for 3 months of rent on April 1 of the current year. On April 30, Sterling Company made an adjusting entry to account for the rent that expired during the month of April. The adjusting entry contained a debit to Rent Expense in the amount of \$ Blank 1 of 3 and a credit to Prepaid Rent in the amount of \$ Blank 2 of 3. The remaining balance in the Prepaid Rent account after the adjustment was

\$800

Explanation:

The computation of the remaining balance in the Prepaid Rent account after the adjustment was is shown below:-

Remaining balance = Prepaid rent - Rent expense

= \$1,200 - (\$1,200 × (1 ÷ 3))

= \$1,200 - \$400

= \$800

Therefore for computing the remaining balance in the Prepaid Rent account we simply applied the above formula.

Sterling Company should debit Rent Expense and credit Prepaid Rent by \$400 for April. The remaining balance in the Prepaid Rent account after the adjustment would be \$800.

### Explanation:

Sterling Company has prepaid its rent for 3 months, which means that \$1,200 is paid for the months of April, May, and June. To calculate the monthly rent, divide the total by the number of months, so each month costs \$1,200 / 3 = \$400. Therefore, at the end of April, Sterling Company should debit Rent Expense and credit Prepaid Rent by \$400 to account for the rent that expired during April. After this transaction, the balance in the Prepaid Rent account would be \$1,200 - \$400 = \$800, which is the prepaid rent for May and June that is not used yet. The adjusting entry records the expiration of prepaid expenses and increases the accuracy of the financial statements.

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Suppose there is a policy debate regarding the United States’ imposing trade restrictions on imported steel rods. Read the following scenario and answer the question that follows.
The president of the United States argues that the United States should threaten to impose a tariff on Chinese steel rods in order to induce the Chinese to remove its tariff on American cars.
Which of the following justifications is the pundit using to argue for the trade restriction on steel rods?

a. National-security argument
b. Infant-industry argument
c. Jobs argument
d. Using-protection-as-a-bargaining-chip argument
e. Unfair-competition argument

Jobs argument justifications is the pundit using to argue for the trade restriction on steel rods

Explanation:

A main argument often put forward to curb trade would be that trade decreases the amount of jobs domestically available.

The point about maintaining jobs is often put forward by employers to protect union jobs. Nevertheless, unions are undermining the market by prohibiting businesses from receiving their products at lower prices, causing them to increase prices. Moreover, businesses are often discouraged from using automation or robotics to retain jobs, which is ironic because automation and robotics improve the productivity of workers, thereby encouraging companies to pay employee salaries and benefits.

A portfolio conssts of 275 shares of Stock C that seilsfor \$52 and 240 shares of Stock D that sells for \$23. What is the portfolio weight of Stock c? a. 7816 b. 8117 c. 7215 d. 2387e. 2785

c. 7215

Explanation:

Number of shares of Stock C = 275

Value of Stock C = \$52

Number of shares of Stock D = 240

Value of Stock D = \$23

The weight of stock of a given stock is defined by the total value of the stock divided by the total value of the portfolio. For stock C:

The weight of of Stock C is 0.7215 or 72.15%.