Simone transferred 100 percent of her stock in purple company to plum corporation in a type a merger. in exchange, she received stock in plum with a fair market value of $577,500 plus $577,500 in cash. simone's tax basis in the purple stock was $200,000. what amount of gain does simone recognize in the exchange and what is her basis in the plum stock she receives?

Analyzing and computing accrued warranty liability and expense waymire company sells a motor that carries a 60-day unconditional warranty against product failure. from prior years' experience, waymire estimates that 2% of units sold each period will require repair at an average cost of $100 per unit. during the current period, waymire sold 69,000 units and repaired 1,000 units. (a) how much warranty expense must waymire report in its current period income statement? (b) what warranty liability related to current period sales will waymire report on its current period-end balance sheet? (hint: remember that some units were repaired in the current period.) (c) what analysis issues must we consider with respect to reported warranty liabilities?