Question
Annie, Joey & Lily form Animal Corporation by contributing the following: Basis of Property Transferred FMV of Property Transferred Number of Shares Issued Cash Received
Annie, Joey & Lily form Animal Corporation by contributing the following:
| | Basis of Property Transferred | FMV of Property Transferred | Number of Shares Issued | Cash Received by Shareholder |
| Annie-Transfers Inventory | 40,000 | 85,000 | 40 | 5,000 |
| Joey - Equipment (Cost 50,000-Depreciation Taken 15,000 | 35,000 | 82,000 | 40 | 2,000 |
| Lily - Cash | 40,000 | 40,000 | 20 | -0- |
| | | | | |
Based on the information above, calculate Annie, Joey & Lily's basis in the Animal Corporation stock and any gain or loss recognized. Also indicate Animal Corporation's basis in the property transferred.
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Fundamentals of Financial Accounting
Authors: Fred Phillips, Robert Libby, Patricia Libby
5th edition
78025915, 978-1259115400, 1259115402, 978-0078025914
