5 1 Part 1 of 3 points 04:30:02 Required information Problem 19-57 (LO 19-4) (Static) [The following information applies to the questions displayed below.] Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Incorporated (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows: Adjusted Tax Basis Appreciation FMV Cash $ 10,000 $ 10,000 Receivables 15,000 15,000 Building 100,000 50,000 Land 225,000 75,000 50,000 150,000 $ $ 350,000 150,000 Total $ 200,000 Payables Mortgage* $ 18,000 112,000 $ 18,000 112,000 $ $ 130,000 130,000 Total The mortgage is attached to the building and land. m SN Prev 1 2 of 25 Next > 1 Part 1 of 3 5 points 04:29:45 Page Total 130,000 130,000 * The mortgage is attached to the building and land. Ernesto was asking for $400,000 for the company. His tax basis in the BLI stock was $100,000. Included in the sales price was an unrecognized customer list valued at $100,000. The unallocated portion of the purchase price ($80,000) will be recorded as goodwill. (Negative amounts should be indicated by a minus sign.) Problem 19-57 Part a (Static) a. What amount of gain or loss does BLI recognize if the transaction is structured as a direct asset sale to Amy and Brian? What amount of corporate-level tax does BLI pay as a result of the transaction? Cash paid Liabilities assumed Amount realized Answer is not complete. Adjusted Basis Gain or Loss Recognized Tax Rate Tax S 407,550 407,550 S 407,550 % $ 0