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A shareholder transfers inventory (which cost him $40,000) in exchange for 80% of a corporations...

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Accounting

A shareholder transfers inventory (which cost him $40,000) in exchange for 80% of a corporations common stock shares (worth $45,000) and $5,000 cash. How much gain does the shareholder recognize on the transaction?

A. $5,000

B. $10,000

C. No Gain is Recognized

D. ($5,000

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