David Owns 600 Shares of K Corporation Stock When K

question 57

Multiple Choice

David owns 600 shares of K Corporation stock when K is merged into Parent Corporation.David receives 500 shares of Parent Corporation stock (fair market value = $10,500) and $500 cash in exchange for his K Corporation stock.David's K stock had a basis of $8,000 and an $11,000 fair market value.What is David's realized and recognized gain, respectively?

• A)$3,000 and $3,000
• B) $3,000 and $2,500
• C)$2,500 and $500
• D)$3,000 and $500

Understand how to view and edit account preferences and settings in QuickBooks.

Understand the relationship between future price expectations and current demand.

Analyze market equilibrium, including the effects of changes in supply and demand on price and quantity.

Understand the concept of surplus and shortage in a market and calculate its magnitude.

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Definitions:

Canada Revenue Agency

The federal agency responsible for administering tax laws and various social and economic benefit and incentive programs delivered through the tax system for the Government of Canada.

Simple Interest

A method of calculating interest where the charge is based on the original principal amount and does not compound.

Principal Amount

The original sum of money lent in a loan or invested, excluding any interest or profits.

Accrued Interest

Interest on a loan or bond that has accumulated but not yet been paid.