Wheeler Electrical Supplies Inc. Facts

Wheeler Electrical Supplies, Inc. is a C corporation that used to be owned by four individuals. Because the business has been operating at a loss for the past several years, three out of the four shareholders decided to sell their outstanding shares to Angela Clay, the one shareholder convinced that becoming the sole owner herself will allow her to run a profitable business again.

Mr. Shields’ should accept Mr. Fordham’s proposal in relation to the acquisition of Upstate Canning Company, Inc. In this case, Mr. Shields attempts to conclude if he should acquire the company from its owner, Mr. Fordham, using his personal savings of $35,000 in addition to an investment of $65,000 from his associates. Moreover, Mr. Fordham proposes that he will loan Mr. Shields’ $300,000 worth of income bonds, to be repaid in up to 10 years. Mr. Fordham provides Mr. Shields’ with a bond repayment schedule which allows Mr. Shields’ to repay the bonds at a discount if he meets the wishes to repay the bonds back early. Mr. Shields’ faces a

US GAAP Alternative A: Meyer Inc. meets both of the characteristics of the primary beneficiary requirements as stated in ASC 810-10-25-38A and thus Florabama’s financials are consolidated up to Meyer Inc’s financial statements. In determining the power to direct the activities of a VIE that most significantly impacts the entity’s economic performance, the purpose and design of a legal entity must be evaluated (ASC 810-10-25-25). Through analysis of the business risks incurred in ASC 810-10-25-24, the most significant risk is the operations risk, commodity price risk, and also environmental risk. These risks are directly related to the strategic decisions regarding the operations of Florabama, such as operating and capital budgets, pricing of the power produced. These are the most significant activities regarding the economic performance of Florabama. According to the case information, these decisions are presented to the board and implemented by a simple majority vote among the ten members of the board of

Parent Corporation has owned 60% of Subsidiary Corporation’s single class of stock for a number of years. Tyrone owns the remaining 40% of the Subsidiary stock. On August 10, of the current year, Parent purchases Tyrone’s Subsidiary stock for cash. On September 15, Subsidiary adopts a plan of liquidation. Subsidiary then makes a single liquidating distribution on October 1. The

Case 4: As of January 1, the Lohse Company owes the First Arbor Bank $350,000 which is due on December 31. Since Lohse seems unable to repay the note, the bank agreed that Lohse can “settle” this balance by agreeing to make four, annual installments on each of the next four years, provided that it adds a “due on

A second mortgage loan officer, Sarah Harris, agreed to a $450,000 mortgage for a 20-year period at 8% interest rate after appraisal based on an income approach using 10.9% capitalization rate. Although not certain of her judgment, she considered Alexander’s projected figures realistic, but required him to personally sign the note as additional protection to the bank against loss.

As part of the expansion plan, Wie will acquire some used equipment by signing a zero-interest-bearing note. The note has a maturity value of $50,000 and matures in 5 years. A reliable fair value measure for the equipment is not available, given the age and specialty nature of the equipment. As a result, Wie 's accounting staff is unable to

Chris and Sue are 50 percent shareholders in BackBone personal service corporation. Backbone provides chiropractic services in four separate offices, in four small towns: Troy, Union, Vista and Willow. Chris is the main chiropractor in the Troy office, and Sue heads up the Vista office. Charlie, the main chiropractor in the Willow office, does not see eye-to-eye with Chris and Sue on management styles. Charlie is highly competent and well-liked by patients and therefore indispensable in the eyes of Chris and Sue. Chris and Sue may be willing to give Charlie control of the Willow office, but do not want to lose the profits this office adds to BackBone. A corporate reorganization seems to be a good alternative.

As a result, there will be insufficient sales proceeds to pay of the Note and any tax lien. Because our clients’ lien is in a superior position, they can proceed to foreclose on their lien without a release of the California Department of Tax lien. Nevertheless, in order to insure a smooth sale of the motor vessel, our clients offer on behalf of JET BOATS USA, INC. an Offer in Compromise in the sum of $5,000 in order to obtain a release of any California Department of Taxation lien on the

Chris and Sue are 50 percent shareholders in BackBone personal service corporation. Backbone provides chiropractic services in four separate offices, in four small towns: Troy, Union, Vista and Willow. Chris is the main chiropractor in the Troy office, and Sue heads up the Vista office. Charlie, the main chiropractor in the Willow office, does not see eye-to-eye with Chris and Sue on management styles. Charlie is highly competent and well-liked by patients and therefore indispensable in the eyes of Chris and Sue. Chris and Sue may be willing to give Charlie control of the Willow office,

Car that Fast Ed gave to Slick Sam has the market value of $19,000 and the car’s actual cost to fast Ed was $17,000 which he exchanged for a obligation of %18,000 which he owned to Slick Sam and that transaction will be assessable as independent business income under (s 6-5 of ATAA 1997). In that event if the transaction is not the arm’s length, then the amount to compute assessable pay will be market value (S 70-20). As the market value was $19,000 thus the income will be $2000 to be incorporated as the business Income. The salary from exchange will be assessable when Fast Ed gave the auto to the Slick Sam.

The company have a small outstanding balance on an improvements loan. The store front area is desperately in need of renovation, which can run anywhere between $15,000 -$30,000. Dry cleaning equipment located in store front, which can paint an undesirable picture to customers. No member of the Snead family is willing to work at the company, which will force Sheldon to hire on new employees and pay higher wages. The company’s dry cleaning equipment is on its last leg and has approximately 3-5 years of life left. If the company’s equipment is inoperable, Snead’s Dry, Cleaning Company will be forced to close its doors indefinitely. In this case, these weaknesses place Snead’s Dry Cleaning Company at

We agreed to accept payment that would turn WoodCrafters no profit for work rendered, and allow for future work to be done as a means of paying off the $200,000 outstanding debt. Furthermore, we agreed that Pat would write-off the rent owed for 10,000 and only pay a total of 810,000 (490,000 cash and 2 condos with market value of 160,000 each).

While it appears that all liabilities would be able to receive their full payments, the risk of the liabilities not receiving their full

Peregrine sold the receivables, transferred title to the factor, who assumed all the risks of ownership. In this factoring agreement the accounts receivable were removed from the balance sheet, and the receivables were sold without recourse. This meant that if the receivables were not collected, the factor cannot demand payment.