Riverwalk Corporation Is Liquidated, with Juan Receiving $5,000 in Money

question 67

Multiple Choice

Riverwalk Corporation is liquidated, with Juan receiving $5,000 in money, other property having a $6,000 FMV, and a $1,000 mortgage on the property. Juan's basis in his River walk stock is $8,000. Upon liquidation, Juan must recognize a gain of

• A)0)
• B)$2,000.
• C)$3,000.
• D)$11,000.

Identify what constitutes an unusual item on an income statement and the implications of various unusual items.

Understand the presentation of other comprehensive income and the components of a corporate annual report.

Match financial ratios to their appropriate uses, demonstrating an understanding of liquidity, solvency, profitability, and efficiency analysis.

Understand and apply financial ratio analysis to assess a company’s profitability, liquidity, and solvency.

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Definitions:

Disbursement Float

The amount of time it takes for money to be withdrawn from one account and cleared in another, affecting the available balance.

Collection Float

The time period between when a check is deposited into a bank account and the time the funds are available and officially credited to the account.

Book Balance

refers to the current balance in a company’s accounting records, not including any pending transactions that have not yet been cleared or settled.

Net Collection Float

The time difference between when a check is deposited and when the funds are available in the firm's account, affecting available cash.