General inertia corporation made a pro rata distribution of $50,000 to tiara, inc. in partial liquidation of the company on december 31, 20x3. tiara, inc. owns 500 shares (50%) of general inertia. the distribution was in exchange for 250 shares of tiara's stock in the company. after the partial liquidation, tiara continued to own 50% of the remaining stock in general inertia. at the time of the distribution, the shares had a fair market value of $200 per share. tiara's income tax basis in the shares was $100 per share. general inertia had total e& p of $800,000 at the time of the distribution. what amount of dividend or capital gain does tiara recognize because of the transaction?

Which alternative accounting method allows farmers to record expenses and incomes in the year in which they sell their yield? gaap allows for the method, which permits farmers to subtract the expenses of producing the crop in the year in which they sell the yield and earn the revenue.

Aprice ceiling is “binding” if the price ceiling is set below the equilibrium price. suppose that the equilibrium price is $5. if a price ceiling is set at $6, this will not affect the market in any way since $5 remains a legally allowable price (since $5 < $6). a price ceiling of $6 is called a “non-binding” price ceiling. on the other hand, if the price ceiling is set at $4, the price ceiling is “binding” because the natural equilibrium price is $5 but that is no longer allowed. what happens when there is a binding price ceiling? at a price below the equilibrium price, quantity demanded exceeds quantity supplied. there is a shortage. normally, price increases eliminate shortages by increasing quantity supplied and decreasing quantity demanded. in this case, however, price increases are not allowed past the price ceiling. we therefore predict that the observed market price will be right at the price ceiling and there will be a permanent shortage. the observed quantity bought and sold will be dictated by the quantity supplied at the price ceiling. although consumers would like to buy more, there are no more units for sale

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