Courtney Is Interested in Purchasing the Matrix Company ?
IIf Courtney Buys the Stock of the Matrix for $225,000

Multiple Choice

Courtney is interested in purchasing The Matrix Company. Matrix's assets are:
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$$\begin{array} { l r r } & \text { Adjusted Basis } & \text { Fair Market Value } \\\text { Cash } & \$ 2,300 & \$ 2,300 \\\text { Inventory } & 16,500 & 19,200 \\\text { Equipment } & 13,000 & 9,000 \\\text { Land } & 25,000 & 40,500 \\\text { Building } & 66,600 & \$ 129,000 \\\text { Totals } & \$ 123,400 & \$ 200,000\end{array}$$
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I.If Courtney buys the stock of The Matrix for $225,000, the total basis in the assets will be $200,000.
II.If Courtney pays Matrix $240,000 for the Matrix assets, Courtney's total basis in all of the assets of the business will be $123,400.
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A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements are correct.
D) Neither statement is correct.