During the Year, R and S Established T Corporation, Which

question 49

True/False

During the year, R and S established T Corporation, which issued 100 shares of stock.R transferred land worth $9,000 (basis $8,000) to the corporation for 90 shares of stock while S contributed services worth $1,000 for 10 shares of stock.Neither R nor S must recognize income due to their respective transfers.

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Definitions:

Total Fixed Costs

Costs that do not vary with the level of output or sales, such as rent, salaries, and insurance premiums.

Total Costs

sum up all the costs incurred by a business in the production of goods or services, including both fixed and variable costs.

Economic Profits

The profit a firm makes after deducting both its explicit and implicit costs, reflecting the total opportunity costs of all resources used.

Yearly Return

The total gain or loss on an investment over a one-year period, expressed as a percentage of the investment's initial value.