What is the solution to this problem?

Flintstone Company is owned equally by Fred Stone and his sister Wilma, each of whom hold 2,400 shares in the company. Wilma wants to reduce her ownership in the company, and it was decided that the company will redeem 480 of her shares for $30,700 per share on December 31 of this year. Wilmaâs income tax basis in each share is $7,900. Flintstone has current E&P of $10,930,000 and accumulated E&P of $50,210,000.
a. What is the amount and character (capital gain or dividend) recognized by Wilma as a result of the stock redemption, assuming only the "substantially disproportionate with respect to the shareholder" test is applied?
b. What is Wilmaâs income tax basis in the remaining 1,920 shares she owns in the company?
c. Assuming the company did not make any dividend distributions this year, by what amount does Flintstone reduce its E&P as a result of the redemption?

Answer:

Explanation:

From the given information:

In Flinstone company;

The old ownership = 2400/(2400+200) = 50%

New onwership = 1920/(1920 + 2400) = 44.4%

The reduction in Wilma ownership in Flinstone company is from 50% to 44.4%

Dividend amount perceived by WIlma is:

$30700 × 480 shares = $14,736,000

The responsibility of Wilma in the wake of taking the redemption is in reality more than the 40% (80% x 50%), so she fails the considerably disproportionate test.

Hence, dividend recognition = $1,47,36,000

b)

Wilma's personal income tax expense premise in excess shares can be determined by summing back the unused tax premise of 480 offers reclaimed to the premise of her leftover offers 1920.

unused tax premise of 480 shares = 480 × $7900 = $37,92,000

premises of the remaining shares = 1920 × $7900 = $1,51,68,000

In the remaining shares, WIlma income tax =  $37,92,000 + $1,51,68,000

= $1,89,60,000

c)

Flintstone will make the decrease in its E&P by a measure of profit perceived by Wilma =$1,47,36,000

Otto and Monica are married taxpayers who file a joint tax return. For the current tax year, they have AGI of $99,600. They have excess depreciation on real estate of $59,760, which must be added back to AGI to arrive at AMTI. The amount of their mortgage interest expense for the year was $19,920, and they made charitable contributions of $9,960. They have no other itemized deductions. If Otto and Monica's taxable income for the current year is $69,720, determine the amount of their AMTI.

Convertible securities are bonds or preferred stock that, under specified terms and conditions, can be exchanged for common stock at the option of the holder. Conversion of these securities does not provide new capital; debt (or preferred stock) is simply replaced on the balance sheet by common stock. However, reducing the debt or preferred stock will improve the firm’s financial position and make it easier to raise additional capital, but raising additional capital requires a separate action.

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a. Because convertibles have low coupon rates, they require the firm to sell common stock at discount prices relative to prices that are currently prevailing.
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c. If the company truly wants to raise equity capital and if the stock price does not rise sufficiently after the bond is issued, then the company will be stuck with debt rather than the desired equity. ___________ is/are correct.

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John received a promotion at work and felt new clothes would be necessary in the new position. John went to a local store and charged three ties on his charge account at a cost of $60 each. Bill, a friend of John's, saw a sidewalk vendor selling ties at a cost of three for $10 and bought three at that price. The friends compared purchases that night and found that they had purchased identical ties. John became enraged and said that he would not pay the charge-account bill because the ties were clearly not worth $60 each. Bill indicated that he would testify on John's behalf if litigation ensued. What would be the probable outcome of the lawsuit

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Quark Inc. just began business and made the following four inventory purchases in June: June 1 150 units $ 825 June 10 200 units 1,120 June 15 200 units 1,140 June 28 150 units 885 $3,970 A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for June is

Suppose that the Federal Reserve decides to decrease the money supply with a $300 purchases of Treasury bills. Complete the tables that represent the financial position of the Federal Reserve and commercial banks after this open-market operation. Be sure to use a negative sign for reduced values.

Federal Reserves Assest Liabilities


Commercial Reserves Assets Liabilities

For the Federal Reserve, what are assets? What are liabilities?

a. Monetary base; Reserves
b. Monetary base; Treasury bills
c. Treasury bills; Reserves
d. Reserves; Treasury bill
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Organizations face myriad barriers and obstacles to effectively increasing and embracing diversity in their workplaces. Some of these barriers stem from people in the organization who are resistant to changing the organization to make it more diverse. This activity is important because resistance to this type of change is an attitude that managers will come up against frequently, and managers should be able to recognize when this occurs so that they can manage the organization and its employees through this challenging but very important type of change.
The goal of this exercise is to challenge your knowledge of the barriers to diversity.
Stereotypes and Prejudices
Fear of Discrimination Against Majority Group Members
Resistance to Diversity Program Priorities
A Negative Diversity Climate
Lack of Support for Family Demands
A Hostile Work Environment for Diverse Employees
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Assume that a $1,000,000 par value, semiannual coupon US Treasury note with three years to maturity has a coupon rate of 3%. The yield to maturity (YTM) of the bond is 11.00%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note:$960,214.55$504,112.64$680,151.97$800,178.79

Is a measurement of the way suppliers respond to a change in price

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Sales revenue $294,000
Cost of goods sold
Beginning inventory $34,400
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Goods available for sale 232,400
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Gross profit 124,964
Operating expenses 63,400
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Net income $36,938

Required:
Prepare the income statement to reflect lower of cost or net realizable value valuation of the current year ending inventory.

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Questions answer them

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a. State 1: $ _________
b. State 2: $ _________
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april 1
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cash 342 (c)
april 10
???????????????????? 72 (d)
miscellaneous expense 48 (d)
postage expense 52 (d)
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petty cash ??
cash ??

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July 180,000 200,250
August 315,000 308,250
September 270,000 259,500
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