Gull Corporation was undergoing reorganization under the bankruptcy laws.The shareholders,who had made loans of $250,000 to the corporation,agreed to accept additional stock with a value of $200,000 instead of repayment on the debt.The Old Line Insurance Company,which had a $350,000 mortgage on the building,agreed to reduce the principal to $300,000.A trade creditor with a receivable of $150,000 from the company agreed to accept $70,000 in full payment for the debt incurred to purchase goods that were still on hand.Finally,the company transferred some equipment with an adjusted basis of $60,000 in satisfaction of a liability for $70,000.Compute the corporation's gross income and other adjustments necessary as a result of the above transactions.

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The Answer of Gull Corporation was undergoing reorganization under the bankruptcy laws.The shareholders,who had made loans of $250,000 to the corporation,agreed to accept additional stock with a value of $200,000 instead of repayment on the debt.The Old Line Insurance Company,which had a $350,000 mortgage on the building,agreed to reduce the principal to $300,000.A trade creditor with a receivable of $150,000 from the company agreed to accept $70,000 in full payment for the debt incurred to purchase goods that were still on hand.Finally,the company transferred some equipment with an adjusted basis of $60,000 in satisfaction of a liability for $70,000.Compute the corporation's gross income and other adjustments necessary as a result of the above transactions.

Gull Corporation Was Undergoing Reorganization Under the Bankruptcy Laws