Explore BrainMass

Calculate after tax cash flow from sale of inventory to Brad

13. Johnson Inc sold inventory to its sole shareholder, Brad, at its FMV of $140,000 when its tax basis was $200,000 resulting in a $60,000 realized loss. The corporation's marginal tax rate for the year was 34%. Its after-tax cash flow from the sale was

A. $100,000
B. $20,400
C. $140,000
D. $119,600

Please show work in detail

Solution Preview

The problem asks for cash flow.

We start with the amount received in the ...

Solution Summary

The solution explains the detailed calculations for the answer.