Cowboy Corporation Owns 90% of the Single Class of Stock

question 25

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:

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Definitions:

Cost Object

Anything for which a separate measurement of costs is desired, including products, services, projects, activities, or customers.

Management Interest

The concern or focus areas of organizational managers, particularly regarding strategy, operations, and achieving objectives.

Cost Pool

A grouping of individual costs typically associated with manufacturing processes, designed to simplify the allocation of overheads to products or services.

Plantwide Overhead Rate

A single overhead absorption rate used throughout a manufacturing plant or facility to allocate indirect costs to products.