Cowboy Corporation Owns 90% of the Single Class of Stock

question 15

Multiple Choice

Cowboy Corporation owns 90% of the single class of stock in Doggie Corporation. The other 10% is owned by Miguel, an individual. Cowboy's basis in its Doggie Corporation stock is $100,000 and Miguel's basis is $50,000. Doggie Corporation distributes property having an adjusted basis of $150,000 and an FMV of $500,000 to Cowboy Corporation, and $60,000 of money to Miguel as a liquidating distribution. Doggie and Cowboy Corporations must recognize gain of:

---

Definitions:

Quick Ratio

A liquidity measure that indicates a company's ability to cover its short-term obligations with its most liquid assets.

Statement Of Cash Flows

A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents.

Financing Activity

Transactions and events where cash is raised for business purposes, including issuing equity, borrowing, and repaying loans.

Fixed Asset Acquisition

The process of purchasing fixed assets, like property, plant, and equipment, that are used over a long period in the operation of a business.