Question

Parchment, Inc., is created with the following asset and liability contributions. Jake and Fran each receive 100 shares of Parchment common stock.
*The land is subject to a mortgage of $20,000 that Parchment assumes.
a. Prepare a financial accounting balance sheet for Parchment. Discuss the relevance of conduit theory and entity theory in the creation of Parchment.
b. Prepare a tax balance sheet for Parchment. Discuss the relevance of conduit theory and entity theory in the creation of Parchment.
c. Assume that Parchment sells the land for $150,000 four months after Parchment was created. Discuss the effect of the sale on the financial accounting balance sheet and the tax balance sheet.


$1.99
Sales12
Views154
Comments0
  • CreatedMay 25, 2015
  • Files Included
Post your question
5000