Required information Problem 19-57 (LO 19.4 (Algo) The following information applies to the questions displayed below) Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Incorporated (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows: Cash Receivables Building Land TV 531,500 17.000 113,500 272.000 435,000 Adjusted as Appreciation $ 31,500 17.000 56,750 56.750 91,000 182,000 $196,259 $ 238,950 Total Payabled Mortgage 522,300 182 250 $ 204,550 $ 22.900 182,250 $ 204,550 Total The mortgage is attached to the building and land. Ernesto was asking for $450,200 for the company His tax basis in the BLI stock was $120.000. Included in the sales price was an unrecognized customer list valued at $138,000. The unallocated portion of the purchase price (581.750) will be recorded as goodwill. (Negative amounts should be indicated by a minus sign.) Problem 19-57 Part a (Algo) a. What amount of gain or loss does BLI recognize if the transaction is structured as a direct asset sale to Amy and Brian? What amount of corporate-level tax does BLI pay as a result of the transaction? Payablea Mortgage Total $ 22,300 102,250 $.204.550 $ 22,00 182,250 5 204.550 . The mortgage is attached to the building and land. Ernesto was asking for $450,200 for the company. His tax basis in the stock was $120.000. Included in the sales price was an unrecognized customer list valued at $138,000. The unallocated portion of the purchase pnce (581,750) will be recorded as goodwill. (Negative amounts should be indicated by a minus sign.) Problem 19-57 Part a (Algo) a. What amount of gain or loss does BLI recognize if the transaction is structured as a direct asset sale to Amy and Brian? What amount of corporate-level tax does BLI pay as a result of the transaction? $ 0 Cash paid Liabilities assumed Amount realized Adjusted Basis Gain or Loss Recognized Tax Rate Tax $ 0 $ 0 Prey 1 3 of 3 !!! Next > Utv 126 (cm 2 Problem 19-57 (LO 19-4 (Algo) The following information applies to the questions displayed below Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Incorporated (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tom accounting balance sheet. The relevant information is summarized as follows: 2013 w Cau Heelwalten Building tand TV 1,500 17.000 113,500 27.000 435,000 Adjusted Tas Nasi Apation SO 120DD 56,250 54.50 9.000 12 DOO 196.250 230.750 Total Hayat Morte 22.30 10250 204. 23.00 IDEO 204.30 Total The mortgage is attached to the building and land Ernesto was asking for $450,200 for the company. His tax bosis in the BL stock was $120,000 included in the sales price was an unrecognized customer list Valued at $138.000. The unallocated portion of the purchase price (581.750) will be recorded as goodwill (Negative amounts should be indicated by a minus sign) Problem 19-57 Part b (Algo) b. What amount of gain or loss does Ernesto recognize if the transaction is structured as a direct asset sale to Amy and Brian, and BLI distributes the after tax proceeds (computed in part (o)] to Emesto in liquidation of his stock? (Round intermediate calculations and final answer to the nearest whole dollar amount) Gain or is recognized ca Neceivable building and INV 31,500 17.000 113.500 222.000 #435.000 Adjusted a Rai Appreciation 31,300 17.000 56.750 S6750 21 000 2.2000 196,250 230.750 SO Payable Mortgage Total $ 22, 200 182/250 $ 204.550 $ 22,500 182/250 $ 204.550 The mortgage is attached to the building and land, Ernesto was asking for $450,200 for the company His tax basis in the Bli stock was $120,000. Included in the sales price was an unrecognized customer list valued at $138.000. The unallocated portion of the purchase price (581750) will be recorded as goodwill. (Negative amounts should be indicated by a minus sign.) Problem 19-57 Part c (Algo) c1. What are the tax benefits. If any, to Amy and Brian as a result of structuring the acquisition as a direct asset purchase? 2. What is the tax basis in the assets received by Amy and Brian? CS Complete this question by entering your answers in the tabs below. Reg ei Reg 2 What are the tax benefits, if any, to Amy and Brian as a result of structuring the acquisition as a direct asset purchase? No tax benefits! Tax basis in the assets received equal to the assets fair market value Req c2 > Required information Problem 19-57 (LO 19-4 (Algo) The following information applies to the questions displayed below) Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Incorporated (BLI). As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows: Cash Receivables Building Land Total THV $31.500 17.000 113,500 222.000 $ 435,000 Adjusted TAK Bante Appreciation $31.500 17,000 56,750 56,250 91.000 102,000 $ 196,250 $ 230,750 Payables Mortgage Total $22,300 192,250 $ 204,550 5 22,100 102,250 $ 204,550 The mortgage is attached to the building and land. Ernesto was asking for $450,200 for the company His tax basis in the BLI stock was $120,000. Included in the sales price was an unrecognized customer list valued at $138,000. The unallocated portion of the purchase price ($81,750) will be recorded as goodwill. (Negative amounts should be indicated by a minus sign.) Problem 19-57 Part a (Algo) a. What amount of gain or loss does Bui recognize if the transaction is structured as a direct asset sale to Amy and Brian? What amount of corporate-level tax does BLI pay as a result of the transaction? Problem 19-57 Part a (Algo) a. What amount of gain or loss does BLI recognize if the transaction is structured as a direct asset sale to Amy and Brian? What amount of corporate-level tax does Bul pay as a result of the transaction? $ Cash paid Liabilities assumed Amount realized Adjusted Basis Gain or Loss Recognized Tax Rate $ 0 Tax $ 0 $ 2 ora ere information Problem 19-57 (LO 19.4 (Algo) [The following information applies to the questions displayed below) Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Incorporated (BLI). As part of their discussions with the sole shareholder of the corporation, Emesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows: pped Cash Maceivables building Land Total THY $31.500 17.000 313,500 273,000 5.435.000 Adjusted Tax Apation 1,500 17,000 56.750 56,70 91.000 182.000 #196,250 $ 230,750 ON Payable 22,300 22,300 Morte 183,250 102.250 Total #204.550 204.550 * The mortgage is attached to the building and land. Emesto was asking for $450,200 for the company. His tax basis in the BLI stock was $120,000. Included in the sales price was an unrecognized customer list valued at $138,000. The unallocated portion of the purchase price (581750) will be recorded as goodwill (Negative amounts should be indicated by a minus sign) mncm Problem 19-57 Part b (Algo) b. What amount of gain or loss does Emesto recognize if the transaction is structured as a direct asset sale to Amy and Brian, and BLI distributes the after-tax proceeds (computed in part(s) to Emesto in liquidation of his stock? (Round intermediate calculations and final answer to the nearest whole dollar amount.) Caine los recogid Problem 19-57 Part c (Algo) int ct. What are the tax benefits, if any, to Amy and Brian as a result of structuring the acquisition as a direct asset purchase? c2. What is the tax basis in the assets received by Amy and Brian? ik Complete this question by entering your answers in the tabs below. int Regci Req c2 ences What is the tax basis in the assets received by Amy and Brian? Cash Accounts receivable Building Land Customer list Goodwill Total $ 0