Mr. Daniel has preferred shares in ABC Corporation. The Board of Directors of ABC is thinking of selling substantially all of the company’s assets. A meeting was called to vote on said matter. Mr. Daniel is thinking if he can vote on the said meeting. He comes to you, his bright accountant, for advice, what would be your answer to him? pls help me, thank you

Mr. Daniel has preferred shares in ABC Corporation. The Board of Directors of ABC is thinking of selling substantially all of the company’s assets. A meeting was called to vote on said matter. Mr. Daniel is thinking if he can vote on the said meeting. He comes to you, his bright accountant, for advice, what would be your answer to him? pls help me, thank you

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter20: Corporations And Parterships

Section: Chapter Questions

Problem 52P

See similar textbooks

Similar questions

Todd and Elaine purchased for $300,000 a building that was used for manufacturing pianos. Then as promoters, they formed a new corporation and resold the building to the new corporation for $500,000 worth of stock. After discovering the actual purchase price paid by the promoters, the other shareholders desire to have $200,000 of the common stock canceled. Can they succeed in this action?
At the beginning of the question-and-answer portion of the annual shareholder’s meeting of Kemper Ltd., shareholder Mike Kerwin asks, “Why did management sell the holdings in UMW Company at a loss when this company has been very profitable during the period Kemper held its shares?” Since President Tony Chavez has just concluded his speech on the recent success and bright future of Kemper, he is taken aback by this question and responds, “I remember we paid £1,300,000 for those shares some years ago. I am sure we sold these shares at a much higher price. You must be mistaken.” Kervin retorts, “Well, right here in footnote number 7 to the annual report it shows that 240,000 shares, a 30% interest in UMW, were sold on the last day of the year. Also, it states that UMW earned £520,000 this year and paid out £160,000 in cash dividends. Further, a summary statement indicates that in past years, while Kemper held UMW shares, UMW earned £1,240,000 and paid out £440,000 in dividends. Finally,…
Your client, Great Value Hardware Stores, has come to you for assistance in evaluating an opportunity to purchase a controlling interest in a hardware store in a neighboring city. The store under consideration is a closely held family corporation. Owners of 60% of the shares are willing to sell you the 60% interest, 30,000 common stock shares in exchange for 7,500 of Great Value shares, which have a fair value of $40 each and a par value of $10 each.Your client sees this as a good opportunity to enter a new market. The controller of Great Value knows, however, that all is not well with the store being considered. The store, Al’s Hardware, has not kept pace with the market and has been losing money. It also has a major lawsuit against it stemming from alleged faulty electrical components it supplied that caused a fire. The store is not insured for the loss. Legal counsel advises that the store will likely pay $300,000 in damages.The following balance sheet was provided by Al’s Hardware…
Ana, Roro, Reiji, Rnold, Gina and Harold are wondering what form of business they are going to put up with their combined assets of P300,000. Based on the recommendation of Mr. E, an expert, the ideal for them is a corporation. With the recommendation in mind, they agreed to form a corporation named ARRRGH Company and executed its article of incorporation and submitted the same to mayor's office. After a year of operation, they suffered a big loss and decided to terminate their business and as of this date, ARRRGH Company has a total assets of P140,000 and has a liabilities of P190,000 respectively. Based on the preceding information, how much is the combined or consolidated liabilities that Ana, Roro, Reiji, Rnold, Gina and Harold will shoulder
Ana, Roro, Reiji, Rnold, Gina and Harold are wondering what form of business they are going to put up with their combined assets of P300,000. Based on the recommendation of Mr. E, an expert, the ideal for them is a corporation. With the recommendation in mind, they agreed to form a corporation named ARRRGH Company and executed its article of incorporation and submitted the same to mayor's office. After a year of operation, they suffered a big loss and decided to terminate their business and as of this date, ARRRGH Company has a total assets of P140,000 and has a liabilities of P190,000 respectively. Based on these information alone Based on the preceding information, is Ana, Roro, Reiji, Rnold, Gina and Harold liable for ARRRGH Company's liabilities to its creditors? Explain your answers.
Ana, Roro, Reiji, Rnold, Gina and Harold are wondering what form of business they are going to put up with their combined assets of P300,000. Based on the recommendation of Mr. E, an expert, the ideal for them is a corporation. With the recommendation in mind, they agreed to form a corporation named ARRRGH Company and executed its article of incorporation and submitted the same to mayor's office. After a year of operation, they suffered a big loss and decided to terminate their business and as of this date, ARRRGH Company has a total assets of P140,000 and has a liabilities of P190,000 respectively. Based on these information alone Based on the preceding , how much is the combined or consolidated liabilities that Ana, Roro, Reiji, Rnold, Gina and Harold will shoulder
Read the following scenario and answer the question in 5–10 sentences. In 1999, Franklin Johnson, a corporate tax guru, became a shareholder in FurtCorp, Inc., when he purchased 1,000 shares of its stock. Two years ago, FurtCorp purchased $75 million in THB, Inc., stock. Due to changes in the market, the value of the stock has since dropped to $25 million. Franklin recently learned that FurtCorp's Board of Director's has decided to distribute its shares of THB stock to shareholders in the form of a dividend. After carefully analyzing the decision, Franklin has determined that FurtCorp would gain a much larger benefit by taking the depreciation in capital as a tax write-off. Franklin presented his findings to the CEO of FurtCorp, and a special meeting was set before the Board. The Board reviewed, but ultimately rejected, Franklin's proposal and moved forward with the distribution of the dividends. Now, Franklin is threatening to sue FurtCorp's board. How should the Board respond?
Answer it correctly and 100% correct. I will rate accordingly with multiple votes. Explain well. Typed answer only Padgett invests in Bryant Inc., a glass manufacturing company. As a stockholder, he owns a part of the company and he holds the right to vote on company issues. However, he is entitled to dividends only when the company's board of directors decides to do so. According to the company policies, if Bryant Inc. faces dissolution in the future, Padgett will receive his assets only after the company satisfies the claim of the preferred stockholders. Based on the given information, it can be concluded that Padgett is a _____. Group of answer choices convertible stockholder common stockholder cumulative stockholder participating stockholder
Your uncle is ready to retire and head for the hills, so he says to you: “Look, I own 500 shares of stock in Startup, Inc. I’m ready to cash out, so I’ll sell it to you for the very same $25,000 I paid for it back in 2012. And, by the way, it’s qualified small business stock, so you’re completely protected on the downside – even if the company went under, you would get 100% tax cushion for the loss! What do you say…???” On its face, what’s wrong with this offer?
"Now what do I do?" moaned your colleague Matt. "This is a first for me," he confided. You and Matt are recent hires in the Accounting Division of National Paper. A top executive in the company has been given share-based incentive instruments that permit her to receive shares of National Paper equal in value to the amount the company shares rise above the shares' value two years ago when the instruments were issued to her as compensation. The instruments vest in three years. A clause was included in the compensation agreement that would permit her to receive cash rather than shares upon exercise if sales revenue in her division were to double by that time. Because the contingency was considered unlikely, the instruments have been accounted for as equity, with the grant date fair value being expensed over the five-year vesting period. Now, though, surging sales of her division indicate that the contingent event has become probable, and the instruments should be accounted for as a…
Liam, a shareholder in Lager, Inc., (a C corporation), would like to sell 800 of his shares of stock in Lager. Since Lager is not traded on an exchange, the only way to sell is the stock is by having Lager redeem the stock. The fair market value of the 800 shares of stock is $200,000. Liam purchased the stock 10 years ago for $95/share. Lager has E&P of $700,000. The corporate stock in Lager is held as follows: • Liam 2,000 shares • Jennifer (Liam’s sister) 2,000 shares • Katherine (Liam’s mother) 2,000 shares • Beer Partnerships (Liam has a 30% interest) 4,000 shares 10,000 shares if this transaction is treated as a qualified stock redemption, how much tax would Liam owe?
Liam, a shareholder in Lager, Inc., (a C corporation), would like to sell 800 of his shares of stock in Lager. Since Lager is not traded on an exchange, the only way to sell is the stock is by having Lager redeem the stock. The fair market value of the 800 shares of stock is $200,000. Liam purchased the stock 10 years ago for $95/share. Lager has E&P of $700,000. The corporate stock in Lager is held as follows: Liam 2,000 shares Jennifer (Liam’s sister) 2,000 shares Katherine (Liam’s mother) 2,000 shares Beer Partnerships (Liam has a 30% interest) 4,000 shares 10,000 shares How do you calculate the 800 shares of Liam’s stock to be treated as a qualified stock redemption or will it be treated as a distribution?