Warbler is merged into wren corporation. kate receives wren, Ask an Expert

Accounting

Kate owns all the stock in Warbler Corporation. Kate has a basis of $25,000 in the Warbler stock, which currently has a fair market value of $150,000. Warbler is merged into Wren Corporation. Kate receives Wren preferred stock worth $100,000 and common stock worth $50,000. Kate recognizes a gain of:

a. $125,000

b. $100,000

c. $50,000

d. $0

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M938585

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