John Purchases All of the Common Stock of Clarke Corporation

question 5

Multiple Choice

John purchases all of the common stock of Clarke Corporation for $280,000. The assets of the corporation are:
?
$$\begin{array} { l r r } \text { Asset } & \text { Adjusted Basis } & \text { Fair Market Value } \\\text { Inventory } & \$ 25,000 & \$ 50,000 \\\text { Equipment } & 60,000 & 40,000 \\\text { Supplies } & 20,000 & 20,000 \\\text { Building } & 80,000 & 95,000 \\\text { Land } & 10,000 & 20,000 \\& \$ 195,000 & \$ 225,000\end{array}$$
What is John's basis in the common stock he acquired?

• A)$195,000
• B)$215,000
• C)$225,000
• D)$250,000
• E)$280,000

Explore various methods used in managerial skills assessment.

Understand the definition and importance of corporate social responsibility (CSR).

Identify the various types of CSR engagements and their examples.

Recognize the impact of CSR on corporate reputation and stakeholder perception.

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Definitions:

Par Value

The nominal or face value of a stock or bond, as stated by the issuing corporation.

Large Stock Dividend

A distribution of a substantial number of shares to a company's shareholders, often used to conserve cash while still rewarding investors.

Market Value

Market value is the current price at which an asset or service can be bought or sold in the market.

Stock Split

A corporate action that increases the number of a corporation's outstanding shares by dividing each share, which in turn reduces the price per share.