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The stock in Black Corporation is owned by Sam and Susan, who are unrelated. Sam owns...

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Accounting

The stock in Black Corporation is owned by Sam and Susan, whoare unrelated. Sam owns 70% and Susan owns 30% of the stock inBlack Corporation. The following assets are to be distributed incomplete liquidation of Black Corporation: Adjusted Fair MarketBasis Value Cash $100,000 $100,000 Inventory 120,000 140,000Equipment 220,000 180,000 Land 150,000 180,000

a. What gain or loss would Black Corporation recognize if itdistributes the cash, inventory, and equipment to Sam and the landto Susan?

b. What gain or loss would Black Corporation recognize if itdistributes the cash, inventory, and land to Sam and the equipmentto Susan?

Answer & Explanation Solved by verified expert
4.5 Ratings (663 Votes)
Part A With respect to the distributions to Sam Black Corporation will recognize a gain of 20000 on the distribution of the inventory but not the loss of 40000 on the distribution of    See Answer
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