Betty contributed to AlphaBeta Corporation a building with an adjusted basis to Betty of $50,000 and a fair market value of $150,000 that was subject to a mortgage of $120,000 in exchange for 50 percent of the voting common stock (the only class of stock) of the AlphaBeta Corporation. The AlphaBeta Corporation will assume the mortgage on the building. As part of the same transaction, Alfie contributed to AlphaBeta Corporation cash of $30,000 in exchange for the other 50 percent of the voting common stock of AlphaBeta Corporation. How much gain or loss, if any, does Betty recognize with respect to this transaction?
a. $0.
b. $10,000.
c. $70,000.
d. $100,000.
Determine whether the following statement regarding management accounting’s role in assigning decision-making authority is true or false: All members of an organization have some decision-making ability.
The statement of cash flows for Picture Perfect Photography reported the following for the year ended December 31, 2014:
| Cash flows from financing activities: | |
| Dividends (declared and) paid | $(8,000) |
| Proceeds from issuance of common shares | 14,200 |
| Payments of short-term notes payable | (6,700) |
| Payments of long-term notes payable | (1,350) |
| Proceeds from issuance of long-term notes payable | 2,800 |
Make the journal entry that Picture Perfect used to record each of these transactions.
Which of the following statements is true of managerial accounting?
a. The external stakeholders of a company are the primary users of managerial accounting.
b. Managerial accounting information is used to help managers plan and control their operations.
c. An external audit by an independent CPA is required for managerial accounting information.
d. Managerial accounting information must comply with generally accepted accounting principles.
Determine the term being described by the following statement: Agreement to pay stipulated amounts periodically to the donor of assets by the recipient organization.
a. Term endowments
b. Annuity agreements
c. Collections
d. Pooled life income agreements
e. Spending rate
f. Total return
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