Last Year, Toby Made a Capital Contribution of a Pretzel

question 55

Multiple Choice

Last year, Toby made a capital contribution of a pretzel maker having a $2,000 adjusted basis and a $200 FMV to Keke Corporation in exchange for additional stock. This year, Keke Corporation adopted a plan of liquidation. Prior to the adoption of the liquidation plan, Keke had not used the pretzel maker in connection with the conduct of its trade or business. Which of the following statements is true?

• A)Keke Corporation may recognize a loss of $1,800.
• B)Keke Corporation may recognize a loss of $200.
• C)Keke Corporation's basis for determining the loss will be $2,000.
• D)Keke Corporation's basis for determining the loss will be $200.

Understand the concept of working capital management in project evaluation.

Apply depreciation methods in the computation of cash flows for capital budgeting.

Estimate additional revenue or cost savings required to make an investment project financially attractive.

Understand the real-world consequences of data breaches on corporate leadership and organizational structure.

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Definitions:

Core Principles

Fundamental beliefs or values that form the foundation for the system, behavior, or reasoning of an individual or organization.

Primarily Motivated

Being driven or inspired mainly by a certain influence or basic need.

Ego-Driven

Behavior or actions motivated by an individual's ego or self-esteem, often focusing on personal gain or recognition.

Legal Requirement

A mandated regulation or standard that must be adhered to by individuals or entities under the law.