Scenario: Mark Mason and his brother Luke Mason plans to open a business. The major decision they face is how to organize the business. They expect to generate a massive profit during the first year. Although they have enough to start the business now as a partnership, they believe cash flow may be an issue as they grow. They believe that the corporate form of operation will be best option. They have hired you as a consultant and seek your advice. Requirements: 1. Answer the following questions for the Mason brothers. a) How are paid-in-capital and retained earnings: Similar? Different? b) What are the main categories of paid-in capital? c) When does a company declare a cash dividend?
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Please answer requirement 1. parts a, b and c.
Thank you.
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- Scenario:Steve Osbourne is considering opening a business, but the major decision faced is how to organize the business. Steveanticipates generating a massive profit during the first year and that the following years should be relatively profitable.Although he has enough to start the business now as a partnership, he believes cash flow may be an issue as thecompany grows. Steve believes that the corporate form of operation will be his best option and have hired you as aconsultant and seek your advice. c) Explain the term outstanding stock.d) Is it true or false that corporations muse issue common stock, but may or may not decide to issue preferredstock?Scenario:Steve Osbourne is considering opening a business, but the major decision faced is how to organize the business. Steveanticipates generating a massive profit during the first year and that the following years should be relatively profitable.Although he has enough to start the business now as a partnership, he believes cash flow may be an issue as thecompany grows. Steve believes that the corporate form of operation will be his best option and have hired you as aconsultant and seek your advice. e) Is it true or false that all forms and classes of stock carry voting rights?f) Is it true of false that stock sold for amounts in excess of par value results in a gain reported on the incomestatement?Scenario: Matthew Mulatto and his brother John Mulatto plans to open a business. The major decision they face is how to organize the business. They expect to generate a massive profit during the first year. Although they have enough to start the business now as a partnership, they believe cash flow may be an issue as they grow. They believe that the corporate form of operation will be best option. They have hired you as a consultant and seek your advice. Requirements: Answer the following questions for the Mulatto brothers. How are paid-in-capital and retained earnings: Similar? Different? What are the main categories of paid-in capital? When does a company declare a cash dividend? Which characteristic of a corporation limits a stockholder's loss to the amount of his or her investment in the stock of the corporation? What does the term par value of stock mean? The owners are desirous of comparing serval financial transactions and possible outcomes to assist…
- Scenario: Matthew Mulatto and his brother John Mulatto plans to open a business. The major decision they face is how to organize the business. They expect to generate a massive profit during the first year. Although they have enough to start the business now as a partnership, they believe cash flow may be an issue as they grow. They believe that the corporate form of operation will be best option. They have hired you as a consultant and seek your advice. Requirements: Answer the following questions for the Mulatto brothers. How are paid-in-capital and retained earnings: Similar? Different? What are the main categories of paid-in capital? When does a company declare a cash dividend? Which characteristic of a corporation limits a stockholder's loss to the amount of his or her investment in the stock of the corporation? What does the term par value of stock mean? The owners are desirous of comparing serval financial transactions and possible outcomes to assist…Scenario: Matthew Mulatto and his brother John Mulatto plans to open a business. The major decision they face is how to organize the business. They expect to generate a massive profit during the first year. Although they have enough to start the business now as a partnership, they believe cash flow may be an issue as they grow. They believe that the corporate form of operation will be best option. They have hired you as a consultant and seek your advice. Requirements: Answer the following questions for the Mulatto brothers. How are paid-in-capital and retained earnings: Similar? Different? 2. What are the main categories of paid-in capital? 3. When does a company declare a cash dividend? 4. Which characteristic of a corporation limits a stockholder's loss to the amount of his or her investment in the stock of the corporation? 5. What does the term par value of stock mean?Scenario: Steve Osbourne is considering opening a business, but the major decision faced is how to organize the business. Steve anticipates generating a massive profit during the first year and that the following years should be relatively profitable. Although he has enough to start the business now as a partnership, he believes cash flow may be an issue as the company grows. Steve believes that the corporate form of operation will be his best option and have hired you as a consultant and seek your advice. Requirements: Answer the following questions for Steve. Explain the corporate characteristic termed “no mutual agency” Explain the corporate characteristic termed limited liability. Explain the term outstanding stock.
- Scenario: Steve Osbourne is considering opening a business, but the major decision faced is how to organize the business. Steve anticipates generating a massive profit during the first year and that the following years should be relatively profitable. Although he has enough to start the business now as a partnership, he believes cash flow may be an issue as the company grows. Steve believes that the corporate form of operation will be his best option and have hired you as a consultant and seek your advice. Requirements: Answer the following questions for Steve. Is it true or false that corporations muse issue common stock, but may or may not decide to issue preferred stock? Is it true or false that all forms and classes of stock carry voting rights? Is it true of false that stock sold for amounts in excess of par value results in a gain reported on the income statement?Scenario: Matthew Mulatto and his brother John Mulatto plans to open a business. The major decision they face is how to organize the business. They expect to generate a massive profit during the first year. Although they have enough to start the business now as a partnership, they believe cash flow may be an issue as they grow. They believe that the corporate form of operation will be best option. They have hired you as a consultant and seek your advice. Requirements: Answer the following questions for the Mulatto brothers. d) Which characteristic of a corporation limits a stockholder's loss to the amount of his or her investment in the stock of the corporation? e) What does the term par value of stock mean?Scenario: Matthew Mulatto and his brother John Mulatto plans to open a business. The major decision they face is how to organize the business. They expect to generate a massive profit during the first year. Although they have enough to start the business now as a partnership, they believe cash flow may be an issue as they grow. They believe that the corporate form of operation will be best option. They have hired you as a consultant and seek your advice. Requirements: 1. Answer the following questions for the Mulatto brothers. a. Which characteristic of a corporation limits a stockholder's loss to the amount of his or her investment in the stock of the corporation? b. What does the term par value of stock mean? The owners are desirous of comparing several financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2020 and that Mulatto Company’s charter will authorize 1,000,000 shares of…
- Scenario: Matthew Mulatto and his brother John Mulatto plans to open a business. The major decision they face is how to organize the business. They expect to generate a massive profit during the first year. Although they have enough to start the business now as a partnership, they believe cash flow may be an issue as they grow. They believe that the corporate form of operation will be best option. They have hired you as a consultant and seek your advice. Requirements: 1. Answer the following questions for the Mulatto brothers. 2. How are paid-in-capital and retained earnings: Similar? Different? 3. What are the main categories of paid-in capital? 4. When does a company declare a cash dividend? 5. Which characteristic of a corporation limits a stockholder's loss to the amount of his or her investment in the stock of the corporation? 6. What does the term par value of stock mean? The owners are desirous of comparing several financial transactions and possible outcomes to…Scenario: Matthew Mulatto and his brother John Mulatto plans to open a business. The major decision they face is how to organize the business. They expect to generate a massive profit during the first year. Although they have enough to start the business now as a partnership, they believe cash flow may be an issue as they grow. They believe that the corporate form of operation will be best option. They have hired you as a consultant and seek your advice. Owners are desirous of comparing serval financial transactions and possible outcomes to assist in guiding their decision-making process. They assume that the company will be formed on January 1, 2020, and that Mulatto Company’s charter will authorize 1,000,000 shares of common stock and 400,000, $100 par value, 5% cumulative preferred stock. They have asked each student from your accounting course to prepare the company’s journal entries and statement of owner’s equity based on the following information Issued $100,000 shares of…Matthew Mulatto and his brother John Mulatto plans to open a business. Themajor decision they face is how to organize the business. They expect to generate a massive profit during the first year. Although they have enough to start the business now as a partnership, they believe cash flow may be an issue as they grow. They believe that the corporate form of operation will be best option. They have hired you as a consultant and seek your advice. Requirements: 1. Answer the following questions for the Mulatto brothers. a) How are paid-in-capital and retained earnings: - Similar? - Different? b) What are the main categories of paid-in capital? c) When does a company declare a cash dividend? d) Which characteristic of a corporation limits a stockholder's loss to the amount of his or her investment in the stock of the corporation? e) What does the term par value of stock mean? 2. The owners are desirous of comparing serval financial transactions and possible outcomes to assist in…