Snip, Snap and Snur contributed the following to form SSS, Inc.: Adjusted Basis Fair Market Value From
Question:
Snip, Snap and Snur contributed the following to form SSS, Inc.:
Adjusted Basis Fair Market Value
From Snip:
Building & land $200,000 $1,020,000
Mortgage 300,000 300,000
From Snap:
Manufacturing equipment 700,000 925,000*
From Snur:
Cash 50,000 50,000
Technology services -0- 130,000
ZZZ Corporation issued its 10,000 shares as follows:
Snip 400 shares
Snap 500 shares *
Snur 100 shares
1,000 shares
In addition to receiving 500 shares of stock, Snap also received $25,000 in cash.
For Snap
- How much gain(income) or loss must Snap recognize?
- What is Snap’s basis in SSS stock?
- What is SSS basis in manufacturing equpment?
Financial Accounting A User Perspective
ISBN: 978-0470676608
6th Canadian Edition
Authors: Robert E Hoskin, Maureen R Fizzell, Donald C Cherry