Rob,Bill,and Steve Form Big Company

question 50

Multiple Choice

Rob,Bill,and Steve form Big Company.Rob performs $45,000 of services for his shares of the company.Bill transferred property with a basis of $5,000 for $75,000 of stock.Steve contributes cash of $100,000 for his shares.Which of the three must recognize income in the year of the formation?

• A)Rob
• B)Rob,Bill,Steve
• C)Bill
• D)Steve,Bill
• E)Steve,Rob

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Definitions:

Just In Time

An inventory management strategy where materials and goods are produced or acquired only as needed for immediate use.

Lean Business Model

A strategy focusing on creating more value for customers with fewer resources by minimizing waste and optimizing processes.

Implementation Phase

The stage in a project or strategic plan where strategies are executed and plans are put into action.

Short-Term Decisions

Business choices made to affect operations or financial performance in the near future, typically within one year.