Julian Transferred 100 Percent of His Stock in Lemon Company

question 110

Multiple Choice

Julian transferred 100 percent of his stock in Lemon Company to Apricot Corporation in a Type B stock-for-stock exchange. In exchange, he received stock in Apricot with a fair market value of $200,000. Julian's tax basis in the Lemon stock was $400,000. What amount of loss does Julian recognize in the exchange and what is his basis in the Apricot stock he receives?

• A)$200,000 loss recognized and a basis in Apricot stock of $200,000
• B)No loss recognized and a basis in Apricot stock of $400,000
• C)$200,000 loss recognized and a basis in Apricot stock of $400,000
• D)No loss recognized and a basis in Apricot stock of $200,000

Grasp the principles of social cognitive theory, including triadic reciprocal causation.

Understand self-regulation and goal-setting theory, including its implications for motivation and behavior change.

Understand the concept of the demand curve and its relationship with price and quantity demanded.

Identify the effects of price changes on the quantity demanded of goods and the relationship between goods (complements, substitutes, normal goods, and inferior goods).

---

Definitions:

Net Operating Income

A measure of a company's profitability, calculated as gross revenue minus operating expenses, excluding taxes and interest.

Monthly Sales

Monthly sales refer to the total revenue generated from sales activities during a specific month, indicating the performance and growth trends of a business.

Dollar Sales

The total monetary value of sales achieved by a company over a specific period of time, reflecting both volume and price.

Target Profit

Target profit is the amount of net income a business aims to generate, calculated as projected sales minus estimated costs and expenses.