Need answers to all posted MCQ. No need for explanations. Only attempt if you will answer all posted questions.

1. Which of the following statements concerning Type B reorganizations is not correct?

a. Solely voting preferred stock may be used.

b. The result is always a parent-subsidiary group.

c. Solely voting stock of a corporation controlling the acquiring corporation may be used in the transaction.

d. Cash may account for up to 20 percent of the consideration used to make the acquisition.

2. Pursuant to a plan of corporate reorganization in a transaction that qualified as a reorganization under Code Section 368(a)(1), Lou received the following in exchange for a share of stock with a $95 basis to Lou:

One share of stock worth $65

Cash of $20

What is Lous recognized gain or loss (if any) on this exchange?

a. $0

b. $10 loss

c. $10 gain

d. $20 gain

3. Pursuant to a plan of corporate reorganization in a transaction that qualified as a reorganization under Code Section 368(a)(1), Pat exchanged 1,000 shares of Wood Corporation stock that she had purchased for $60,000 for 1,200 shares of Creek Corporation voting stock having a fair market value of $70,000 plus $10,000 in cash. What is Pats recognized gain on the exchange, and what is her basis in the Creek Corporation

stock, respectively?

a. $10,000 gain; $60,000 basis

b. $10,000 gain; $70,000 basis

c. $20,000 gain; $60,000 basis

d. $20,000 gain; $70,000 basis

4. Target Corporation was merged into existing Parent Corporation. As a result of the merger, Target Corporations shareholders received common stock in Parent Corporation having a fair market value of $300,000, and non-convertible bonds of Parent Corporation having a fair market value of $700,000. What type of reorganization has taken place?

a. Type A

b. Type C

c. Type D

d. none of the above.

5. Pursuant to a Type A corporate reorganization, a bondholder exchanged an old $25,000 face value bond with a basis of $25,000, for a new bond with a face value of $30,000 and a fair market value of $35,000. What amount of gain would be recognized by the bondholder as a result of the exchange?

a. $0

b. $5,000

c. $5,833

d. $10,000