Jeremy Operates a Business as a Sole Proprietorship

question 100

Multiple Choice

Jeremy operates a business as a sole proprietorship. The proprietorship uses the cash method of accounting. He decides to incorporate and transfers the assets and liabilities of the sole proprietorship to the newly formed corporation in exchange for its stock. The assets, which include $10,000 of accounts receivable with a zero basis, have a basis of $20,000 and an FMV of $40,000. The liabilities include accounts payable of $12,000, which will be deductible when paid, and a note payable on medical equipment of $7,000. Jeremy's basis for his stock is

• A) $13,000.
• B) $8,000.
• C) $20,000.
• D) $40,000.

---

Definitions:

Psychosexual Identity

An aspect of an individual's identity that relates to their sexual orientation, preferences, attitudes, and feelings.

Womanists

Advocates of womanism, a movement and ideology that centers on the experiences, struggles, and culture of Black women and other women of color.

Women of Color

refers to women of non-white racial or ethnic backgrounds and is used to highlight their unique experiences of discrimination and societal challenges.