Rick Transferred the Following Assets and Liabilities to Warbler Corporation

question 69

Multiple Choice

Rick transferred the following assets and liabilities to Warbler Corporation. $\begin{array}{lrr}&&\text { FairMarket }\\&\text { AdjustedBasis }&\text { Value }\\\text { Building } & \$ 210,000 & \$ 225,000 \\\text { Equipment } & 45,000 & 75,000 \\\text { Trucks } & 15,000 & 30,000 \\\text { Mortgage (held for four years) on building } & 30,000 & 30,000\end{array}$ In return, Rick received $75,000 in cash plus 90% of Warbler Corporation's only class of stock outstanding (fair market value of $225,000) .

• A) Rick has a recognized gain of $60,000.
• B) Rick has a recognized gain of $75,000.
• C) Rick's basis in the stock of Warbler Corporation is $270,000.
• D) Warbler Corporation has the same basis in the assets received as Rick does in the stock.
• E) None of these.

Describe the concept of excess capacity in monopolistic competition and its implications on production levels and profits.

Identify market structures based on characteristics and examples.

Recognize the strategic interdependence of firms in an oligopoly.

Understand the concept and significance of barriers to entry in determining market structures.

---

Definitions:

Memories Stored

The process by which information is encoded, stored, and retrieved in the brain for future use.

Proactive Interference

A phenomenon where older memories interfere with the recall of newer memories, often observed in learning and memory studies.

Retroactive Interference

occurs when newly learned information interferes with and impedes the recall of previously learned information.

Cue-dependent Forgetting

A type of memory loss where the information is not forgotten but cannot be retrieved without specific cues or triggers.