70.2K

Verified Solution

Link Copied!

10. Arlington LLC traded machinery used in its business to a machinery dealer for some new machinery. Arlington originally purchased the machinery for $65,000 and it had an adjusted basis of $30,500 at the time of the exchange. The new machinery had a fair market value of $36,250. Arlington also received $4,500 of office equipment in the transaction. What is Arlington's gain or loss recognized on the exchange?

MULTIPLE CHOICE

a. $0

b. $4,500

c. $5,750

d. $10,250

e. none of the choices are correct

11. Maren received 12 NQOs (each option gives her the right to purchase 15 shares of stock for $9 per share) at the time she started working when the stock price was $11 per share. When the share price was $12 per share, she exercised all of her options. Eighteen months later she sold all of the shares for $25 per share. What is the amount of Maren's bargain element?

MULTIPLE CHOICE

a. $0

b. $540

c. $180

d. $2,160

e. none of the choices are correct

12. Grace's employer is now offering group-term life insurance. The company will provide each employee with $150,000 of group-term life insurance. It costs Grace's employer $770 to provide this amount of insurance to Grace each year. Assuming that Grace is 38 years old, use the table to determine the monthly premium that Grace must include in income as a result of receiving the group-term life benefit.

EXHIBIT 12-10 Uniform Premiums for $1,000 of Group-Term Life Insurance Protection

5-Year Age Bracket	Cost per $1,000 of Protection for One Month
Under 25	$0.05
25 to 29	0.06
30 to 34	0.08
35 to 39	0.09
40 to 44	0.10
45 to 49	0.15
50 to 54	0.23
55 to 59	0.43
60 to 64	0.66
65 to 69	1.27
70 and above	2.06

MULTIPLE CHOICE

a. $0

b. $9.00

c. $17.80

d. $55.75

13. Rachel receives employer provided health insurance. The employer's cost of the health insurance is $5,300 annually. What is her employer's after-tax cost of providing the health insurance, assuming that the employer's marginal tax rate is 35 percent and is profitable?

MULTIPLE CHOICE

a. $0

b. $3,445

c. $4,198

d. $5,300

14. Maren received 12 NQOs (each option gives her the right to purchase 13 shares of stock for $8 per share) at the time she started working when the stock price was $8 per share. When the share price was $17 per share, she exercised all of her options. Eighteen months later she sold all of the shares for $22 per share. What is the amount of Maren's bargain element?

MULTIPLE CHOICE

a. $0

b. $1,404

c. $2,652

d. none of the choices are correct

Answer & Explanation Solved by verified expert

See Answer