The Slazenger Company Has Provided the Following Information

question 85

Essay

The Slazenger Company has provided the following information:
• Shareholders' equity on January 1,2015 was $2,225,900.
• Shareholders' equity on December 31,2015 was $2,379,300.
• Treasury stock costing $71,000 was sold for $62,000;the treasury stock was acquired during 2014.
• A property dividend was declared and distributed during 2015.The property's book value was $42,325 on the declaration date;the property's market value was $54,485 on the declaration date and $57,500 on the distribution date.
• 10,000 shares of $20 par value preferred stock was purchased and retired during 2015.The shares were initially issued for $25 per share and were purchased for $29 per share.
• 5,000 shares of $5 par value common stock were issued as the result of a small stock dividend.The market value per share was $9 at the declaration date and $9.50 at the distribution date.
• Cash dividends declared and paid during the year totaled $70,000.
What was Slazenger's 2015 net income assuming that the only other transactions impacting shareholders' equity are described above?

Explain the basis determination for inherited property and its tax implications.

Differentiate between Section 1231 property and inventory in tax classification.

Understand the rules for carrying forward unused capital losses.

Clarify the treatment of Section 1231 gains and losses under different scenarios.

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