Answer each of the following questions. Explain your answers. Show and label your calculations.

Coconut, Plum, and Mulberry form Fruit Corporation with the following transfers. Adjusted basis Fair market value From Coconut - Cash $116,000 $116,000 Inventory 70,000 98,000 From Plum - Land and building 120,000 253,000 From Mulberry - Accounting services to -0- 44,000 incorporate Equipment 80,000 85,000 Fruit Corporation issues its 800 shares of stock as follows: 288 to Coconut, 336 to Plum, and 176 to Mulberry. In addition, Plum gets $42,000 in cash. Instructions: Answer each of the following questions. Explain your answers. Show and label your calculations. 1. Does Coconut recognize gain (or income)? 2. What basis does Coconut take in the Fruit Corporation stock? 3. What basis does Fruit Corporation take in the inventory? 4. Does Plum recognize gain (or income)? 5. What basis does Plum take in the Fruit Corporation stock? 6. What basis does Fruit Corporation take in the land and building? 7. Does Mulberry recognize gain (or income)? 8. What basis does Mulberry take in the Fruit Corporation stock? 9. What basis does Fruit Corporation have in the equipment