Expert answer:Business Expansion Strategies

  

Solved by verified expert:JIM is acquiring all of the assets of Mason Machining, Inc. in a merger transaction. Mason transfers assets having a FMV of $1,775,000 and an adjusted basis of $995,000 and $200,000 in liabilities to JIM in exchange for $750,000 in cash and $800,000 of JIM’s common stock.Explain what type of merger this is. JIM distributes its stock and cash to Mason in exchange for all of its assets.Calculate Mason’s gain on this transaction.How much of this gain will Mason recognize?How must tax liability will Mason incur from this transfer?Mason distributes the JIM stock and cash to its shareholders for all of their shares of Mason’s stock. Shareholders’ basis in this stock is $600,000.Calculate how much gain the Mason’s shareholders will realize and recognize on this transfer.How must tax liability will Mason’s shareholders incur from this transfer?Explain the tax implications for JIM.Deliverable Length: 1500-2000 words, not including title and references
a_p4_ips.xls

Unformatted Attachment Preview

Don't use plagiarized sources. Get Your Custom Essay on
Expert answer:Business Expansion Strategies
Just from $10/Page
Order Essay

Mason Machining, Inc.
Acquisition Data
Actual
Actual
2005
2006
Balance Sheet
Difference
$200,000
1,575,000
$35,000
Other Assets
$165,000
1,500,000
Total Assets
$1,665,000
$1,775,000
$110,000
$165,000
$225,000
$60,000
Cash
Liabilities
Common Stock, $1 par
Retained Earnings
Total Liabilities & Equity
75,000
1,000,000
500,000
$1,665,000
1,000,000
550,000
$1,775,000
0
50,000
$50,000
$5,250,000
2,500,000
$2,750,000
$6,000,000
2,800,000
$3,200,000
$750,000
$300,000
$450,000
900,000
500,000
$1,350,000
950,000
500,000
$1,750,000
$50,000
$0
$400,000
$5,250,000
2,500,000
2,750,000
900,000
$1,850,000
$6,000,000
2,800,000
3,200,000
950,000
$2,250,000
$750,000
300,000
450,000
$50,000
$400,000
$28,000
3,000
240,000
$271,000
1,200,000
$1,471,000
$40,000
5,000
336,500
$381,500
1,080,000
$1,461,500
$5,000
$8,000
$1,200,000
$1,200,000
Income
Sales
Variable Expenses
Contribution Margin
Less Fixed Expenses:
Costs
Depreciation
Net Operating Income
Cash Flow
Sales
Less Variable Expenses
Contribution Margin
Less Costs
Net Annual Cash Inflow
Assets
Current Assets
Cash
Accounts Receivable
Inventory
Total Current Assets
Plant Equipment
Total Assets
Current Liabilities
Accounts Payable
Equities
Owners’ Equity
$58,000
$76,000
8,000
9,000
468,400
380,000
$534,400
$383,500
960,000
960,000
$1,494,400 $1,343,500
$6,000
$5,000
$1,200,000 $1,200,000
Retained Earnings
Total Owners’ Equity
Total Liabilities
266,000
1,466,000
$1,471,000
253,500
1,453,500
$1,461,500
288,400
138,500
1,488,400
1,338,500
$1,494,400 $1,343,500

Purchase answer to see full
attachment

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 30% with the discount code ESSAYSHELP