Finch Acquired All of the Stock of Gull on January

question 2

Multiple Choice

Finch acquired all of the stock of Gull on January 1, 2007, for $250,000.The parties immediately elected to file consolidated tax returns.Gull generated taxable income of $30,000 for 2007 and paid a dividend of $25,000 to Finch.In 2008, Gull generated an operating loss of $90,000, and in 2009 produced taxable income of $30,000.As of the last day of 2009, what was Finch's basis in the stock of Gull?

• A)$310,000.
• B)$250,000.
• C)$220,000.
• D)$195,000.
• E)Some other amount.

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Definitions:

Mann-Whitney U Test

is a non-parametric statistical test used to compare differences between two independent groups when the dependent variable is ordinal or continuous but not normally distributed.

Chi-Square Test

A statistical test used to determine the significance of an observed association between categorical variables.

R Test

A statistical test used within the R programming environment to determine the significance of data sets or to compare models.

Statistically Significant

A term indicating that the likelihood of obtaining the observed data, or more extreme, by chance is low if the null hypothesis is true.