The Outstanding Stock of Riccardo Corporation Is Owned as Follows

question 13

Multiple Choice

The outstanding stock of Riccardo Corporation is owned as follows: Robert owns 50% of RMD, Inc. stock. The rest of RMD, Inc. stock is owned by unrelated parties. Riccardo Corporation redeems 90 of Robert's shares of stock for $9,000 in the only redemption transaction this year. Robert's basis for his stock is $10 per share (100 shares @ $10 = $1,000) . Riccardo Corporation has $300,000 in E&P. What is Robert's total basis in his remaining 10 shares of stock after the redemption?

• A) 0
• B) $100
• C) $900
• D) $1,000

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Definitions:

Fair Value Movements

describes changes in the fair value of an asset or liability over time, which may be recognized in profit or loss or other comprehensive income.

AASB 141

The Australian Accounting Standards Board document that outlines the accounting treatment for agricultural activity.

IAS 41

International Accounting Standard 41 relates to agriculture. It prescribes the accounting treatment and disclosures related to agricultural activity.

Agricultural Produce

Products that result from the cultivation and harvest of plants, animals, and other organic materials for human consumption and use.