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Stan is the sole shareholder of Hardware Ltd.Hardware purchased all of the shares of Tools Inc.in 20X6 for $500,000.Tools incurred a non-capital loss of $25,000 in the year ended December 31,20X5.Stan has decided to initiate a wind-up of Tools Inc.into Hardware Ltd.on June 23,20X9.Due to the seasonal nature of his sales,Stan would like to maintain the April 30th year end that he has used since beginning his business.
Stan's accountant has prepared the following anticipated balance sheet for Tools Inc.as of June 22,20X9.The fair market value of the assets on both June 22,20X9 and the date of acquisition in 20X6 are presented in the following table:
Accounts Payable
Liabilities owed by a business to its suppliers or creditors for goods and services purchased on credit.
Note Payable
A written promise to pay a certain amount of money at a future date, often including interest.
Borrower
An individual or entity that takes out a loan from another entity or individual under the agreement to repay the amount borrowed, typically with interest.
Creditor
An individual, company, or institution that lends money or extends credit to another party, expecting to be repaid in the future.
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