Question
Rivendell Corporation uses the accrual method of accounting and has the following assets as of the end of 2018. Rivendell converted to an S corporation
Rivendell Corporation uses the accrual method of accounting and has the following assets as of the end of 2018. Rivendell converted to an S corporation on January 1, 2019. (Leave no answer blank. Enter zero if applicable.)
| Adjusted | |||||
| Asset | Basis | FMV | |||
| Cash | $ | 52,000 | $ | 52,000 | |
| Accounts receivable | 42,000 | 42,000 | |||
| Inventory | 148,000 | 66,000 | |||
| Land | 124,000 | 155,000 | |||
| Totals | $ | 366,000 | $ | 315,000 | |
|
| |||||
a. What is Rivendells net unrealized built-in gain at the time it converted to an S corporation?
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International Financial Reporting and Analysis
Authors: David Alexander, Anne Britton, Ann Jorissen
5th edition
978-1408075012
