Greystoke, Inc. acquires the assets of Blackstone, Ltd. for its voting convertible preferred stock and assumes liabilities
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Question:
Greystoke, Inc. acquires the assets of Blackstone, Ltd. for its voting convertible preferred stock and assumes liabilities of $60,000. The assets have a basis of $250,000 and a value of $380,000. One of the shareholders in Blackstone trades her old shares with a basis of $3,000 for stock in Greystoke worth $3,200.
(a.) What kind of reorganization took place?
(b.) What is Greystoke's basis in the acquired assets?
(c.) What is the shareholder's basis in her new stock?
(d.) What would change, if, instead of assuming $60,000 of liabilities, this amount was paid in cash?
Related Book For
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
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