Which of the following events as part of an acquisitive reorganization require the target corpora…

Which of the following events as part of an acquisitive reorganization require the target corpora…

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Which of the following events as part of an acquisitivereorganization require the target corporation to recognize? gain?Assume in all cases that the target corporation liquidates in thereorganization.For each? case, select if the target corporation is required torecognize gain, and select the reason why1. Transfer of appreciated target corporation assets inexchange for acquiring corporation stockand? short-termnotes.A. No, because excess liabilities assumed by the acquiringcompany do not affect gainB. No, liabilities are not tantamount to the receipt of cashC. No, providing the target corporation distributes the cash toit’s shareholdersD. No, providing the target corporation distributes the notes toit’s shareholdersE. No, since the cash is transferred to creditorsF. Yes, because short term notes are bootG. Yes, because excess liabilities assumed by the acquiringcorporation create boot and must be realizedH. Yes, gain is recognized when appreciated assets aretransferred2. Transfer of appreciated target corporation assets inexchange for acquiring corporation stock and the assumption of thetarget? corporation’sliabilities.A. No, because excess liabilities assumed by the acquiringcompany do not affect gainB. No, liabilities are not tantamount to the receipt of cashC. No, providing the target corporation distributes the cash toit’s shareholdersD. No, providing the target corporation distributes the notes toit’s shareholdersE. No, since the cash is transferred to creditorsF. Yes, because short term notes are bootG. Yes, because excess liabilities assumed by the acquiringcorporation create boot and must be realizedH. Yes, gain is recognized when appreciated assets aretransferred3. Assume the same facts as in Part b except the amountof liabilities assumed by the acquiring corporation exceeds theadjusted basis of the target corporation assetstransferred.A. No, because excess liabilities assumed by the acquiringcompany do not affect gainB. No, liabilities are not tantamount to the receipt of cashC. No, providing the target corporation distributes the cash toit’s shareholdersD. No, providing the target corporation distributes the notes toit’s shareholdersE. No, since the cash is transferred to creditorsF. Yes, because short term notes are bootG. Yes, because excess liabilities assumed by the acquiringcorporation create boot and must be realizedH. Yes, gain is recognized when appreciated assets aretransferred4. Transfer of appreciated target corporation assets inexchange for stock and cash. The target corporation distributes thecash to its shareholders.A. No, because excess liabilities assumed by the acquiringcompany do not affect gainB. No, liabilities are not tantamount to the receipt of cashC. No, providing the target corporation distributes the cash toit’s shareholdersD. No, providing the target corporation distributes the notes toit’s shareholdersE. No, since the cash is transferred to creditorsF. Yes, because short term notes are bootG. Yes, because excess liabilities assumed by the acquiringcorporation create boot and must be realizedH. Yes, gain is recognized when appreciated assets aretransferred5. Transfer of appreciated target corporation assets inexchange for stock and cash. The target uses the cash to pay offits liabilities.A. No, because excess liabilities assumed by the acquiringcompany do not affect gainB. No, liabilities are not tantamount to the receipt of cashC. No, providing the target corporation distributes the cash toit’s shareholdersD. No, providing the target corporation distributes the notes toit’s shareholdersE. No, since the cash is transferred to creditorsF. Yes, because short term notes are bootG. Yes, because excess liabilities assumed by the acquiringcorporation create boot and must be realizedH. Yes, gain is recognized when appreciated assets aretransferred

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