AUAF is attempting to hold Kabul, Inc. liable for this debt. Should the court pierce the corporate veil and hold Kabul liable for Alarmaway’s debt?
Q: ad two years remaining. The president of Creative Solutions decided to have the accountant amortize…
A: The patent is to be amortized over the remaining life of the asset in the given case, The C…
Q: Rose Apothecary has just purchased 22% (22,000 shares) of Warner Farms, Inc. They paid $15.30/share…
A: Firm issued various securities to arrange the funds for the business operations like bonds, stock…
Q: Klingon Widgets, Incorporated, purchased new cloaking machinery three years ago for $4.0 million.…
A: Book value of assets of the company The equity value of a corporation as stated in its financial…
Q: Tractor Co. signed a contract to sell a tractor to Green Inc. for $55,000. Green paid for the…
A: Here given the details which can be recognized the sales revenue in the different situation which…
Q: For each of the following situations, indicate whether you agree or disagree with the financial…
A: Financial accounting: Financial accounting is the process of recording, summarizing, and reporting…
Q: Cheese Partners has decided to close the store. At the date of closing, Cheese Partners had the…
A: The partnership comes into existence when two or more persons agree to do the business and further…
Q: Saved Shi Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the…
A: In a Chapter 7 bankruptcy, the remaining assets are distributed among creditors according to…
Q: Bobbie Howell was at home when he received a call from the fire department telling him his store had…
A: To calculate the inventory which is lost in fire , we need to calculate the closing inventory as on…
Q: Shi Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the…
A: Breakdown of Bankruptcy Distribution for Shi Company (Chapter 7)Shi Company is facing a Chapter 7…
Q: Power Pro, Inc., is a large manufacturer of marine engines. In recent years, Power Pro, like other…
A: 1. Power Pro can sell the assets for Swift-Craft as a final product of a drawn-out long-term…
Q: Winderl Corporation did not disclose that it was the defendant in a material lawsuit because the…
A: 1) DisagreeAs it violated Fully disclosure principle.
Q: Tromp Limited is an investment company that purchases buildings and holds them for a number of…
A: As per IAS-40" Investment property"- A property is to be treated as an Investment property if it is…
Q: Please answer the following. Show the complete solution. Thank you so much. 1. Jerome Corporation…
A: For calculating the acquisition cost of any asset, the present value of the amount that needs to be…
Q: Don owns a restaurant in the downtown for 20 years and wanted to sell and retire. He got an offer…
A: When one company acquires another company's business, it typically involves the transfer of…
Q: Kimbo Widgets Inc. purchased new cloaking machinery five years ago for $5 million. The machinery can…
A: Total assets:Total assets refer to the sum total of all resources owned and controlled by a…
Q: The owner of a small furniture manufacturer is retiring and is interested in selling the business to…
A: The employees can get finance from different sources, Some sources are- Loans from bank More…
Q: Warehouse Stationary is planning on merging with Whitcoulls. Warehouse's will pay Whitcoulls's…
A: Current price is the market price of the company prevailing in the stock exchange. For the purpose…
Q: In early 2024, the Prince George operation is sold for $8.735 million, with actual costs to sell of…
A: Discontinued operations refer to the parts of the product line that are cut off and their…
Q: 1. How would GI account for the disposal of the three golf courses? Explain the impact on the…
A: The assets which are held for sale have to be determined first for the impairment loss and this is…
Q: Golf Inc. is a public company that has been in business since the 1980s. It owns and operates over…
A: Accounting for the Disposal of the Three Golf Courses:1 November 20X4:GI recognizes the impairment…
Q: Assume that the undiscounted sum of future cash flows is $18.2 million, instead of $16.5 million.…
A: When the carrying value of an asset exceeds its recoverable amount, an impairment loss occurs.…
Q: Karl Stick is president of Stock Company. He also owns 100 percent of its stock. Karl's salary is…
A: The issue at hand stems from Karl's dual role within the company, serving both as an employee and a…
Q: Describe the possible accounting treatments of this transaction by Glasgow Premium. State which is…
A: Accrual Principle is the accounting principle which states that the revenues are recognized as…
Q: Woodridge USA Properties, L.P., bought eighty-seven commercial truck trailers from Southeast Trailer…
A: Damages are essentially monetary awards that must be given to the individual who has been hurt or…
Q: Smith Corp. is in the process of liquidating and going out of business. The firm has $20,000 in…
A: A person who is the owner/holder of the stock in the corporation is known as a stockholder.
Q: Chadwick Enterprises, Inc., operates several restaurants throughout the Midwest. Three of its…
A: Impairment loss on an asset is recognized when the carrying value of asset is greater than its fair…
Q: Xavier Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the…
A:
Q: Cheese Partners has decided to close the store. At the date of dosing, Cheese Partners had the…
A: Journal entry refers to the process of creating records of all the financial transactions happening…
Q: Ownership in Brooks Brothers Ltd. is represented by 200 000 shares of outstanding common stock on…
A: In this question, we will calculate Earnings per share for two alternatives and select that…
Q: Isolde Corporation, a manufacturer of land mines used in civil wars, has operations around the…
A: Market efficiency refers to the degree to which financial markets reflect all available information…
Q: Midwest Services, Inc., operates several restaurant chains throughout the Midwest. One restaurant…
A: Given: Midwest Services, Inc., operates several restaurant chains throughout the Midwest. One…
Q: Omega, Inc., a publicly held corporation, has assets of $100 million and annual earnings in the…
A: In the above case study of Omega Inc., there are two alternatives available to them. There are three…
Q: Because of a shortage of working capital the company was forced to sell off some land for $300,000…
A: The objective of the question is to understand how the sale of land, its purchase cost, current…
Q: Pauline Company issued 240,000 shares of P10 par common stock with a fair value of P5,100,000 for…
A: A business combination occurs in the case of merger and acquisition.
Q: hi Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company…
A: It is important to note that in a Chapter 7 bankruptcy, most unsecured creditors will not receive…
Q: Because of severe hurricane losses, Donaldson Decorators, one of your oldest and largest clients,…
A: Accounts Receivable One of the major component in the current assets in the balance sheet is…
Q: The company also needed to acquire a series of parts to hold as stock on hand. At the end of the…
A: The objective of the question is to understand how to account for obsolete stock and its impact on…
Q: I do not know if 2.6 million is the correct answer for the second question. Please help me complete…
A: Impairment loss is a decrease in an asset's net carrying value, which is the acquisition cost minus…
Q: ingon Widgets, Incorporated, purchased new cloaking machinery three years ago for $4.4 million. The…
A: Working capital can be found as the difference between current assets and current liabilities and it…
Kabul Inc. wished to buy a company that produced and sold burglar alarms. Accordingly, Kabul formed a Alarmaway Inc., for the sole purpose of buying and operating the business. Kabul contributed $2 million in cash to Alarmaway and held 100% of its stock. After several profitable months, sales began to fall until its total assets dwindled to only $10,000. Alarmaway finally ceased doing business altogether, although it owed its largest creditor, AUAF, Inc. $400,000. AUAF is attempting to hold Kabul, Inc. liable for this debt. Should the court pierce the corporate veil and hold Kabul liable for Alarmaway’s debt?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- ABC Corporation is a manufacturer of small appliances. That is its only line of business. ABC Corporation had two factories. A fire destroys one of the factories. The factory destroyed by the fire accounted for 20% of ABC Corporation's gross revenue, 25% of ABC Corporation's employees and the factory's net fair market value was 20% of ABC Corporation's total net fair market value. ABC Corporation received insurance proceeds of $1,000,000. Rather than rebuilding the plant, ABC Corporation discharges its employees and distributes the $1,000,000 to Adams, its sole shareholder. (a) Will the redemption qualify for sale or exchange treatment under § 302(a)? (b) What would your answer to part (a) be if ABC Corporation had merely sold the factory rather than it having been destroyed by a fire?Miner Company is being forced into bankruptcy. The Company's creditors and stockholders have requested an estimate of the results of liquidation of the Company. Miner's trial balance follows: Accounts Debit Credit Cash P6,000 Accounts receivable 63,000 Allowance for bad debts P2,000 Notes receivable 50,000 Accrued interest on notes receivable 1,200 Inventory Buildings Accumulated depreciation-Buildings Equipment Accumulated depreciation-Equipment Prepaid insurance 60,000 182,000 63,000 14,600 1,400 1,100 Goodwill 8,500 Accrued wages Taxes payable Accounts payable and other liabilities Notes payable Accrued interest payable Common stock 6,000 2,400 170,000 80,000 1,600 110,000 50,000 Retained earnings (deficit) Total P436,400 P436 400 The assets are expected to bring cash on conversion in the following amounts Accounts receivable P50,000 Notes receivable including P1,000 accrued interest 40,800 Building 75,000 Prepaid insurance 400Xavier Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $27,200 in free cash. The following debts, totaling $48,050, remain: Government claims to unpaid taxes $ 8,000 Salary during last month owed to Mr. Key (not an officer) 19,825 Administrative expenses 4,450 Salary during last month owed to Ms. Rankin (not an officer) 7,225 Unsecured accounts payable 8,550 Indicate how much money will be paid to the creditor associated with each debt.
- ABC LLC started its business in the year 1995 and continuing till the date. It has a common practice to record all its business transactions based on the historical cost accounting system. XYZ LLC is the competitor of ABC LLC which has been started in the year 2000. Recently, because of the inefficiency of new management of XYZ LLC, slowly it is falling in losses and it wants to liquidate it as soon as possible. The management of ABC LLC wants to buy XYZ LLC Company in order to reduce the competition and as well as increase the profitability. But ABC wants to convert all the financial statement elements of XYZ LLC into their current values to see the exact financial performance and financial position of the company. Therefore what benefits ABC LLC may get by following the conversion method? Answer the given case by giving your own examples.Shi Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $26,600 in free cash. The following debts, totaling $45,050, remain: Government claims to unpaid taxes Salary during last month owed to Mr. Key (not an officer) Administrative expenses Salary during last month owed to Ms. Rankin (not an officer) Unsecured accounts payable $ 7,400 19,225 3,850 Indicate how much money will be paid to the creditor associated with each debt. Types of Debts Administrative expenses Salary during last month owed to Mr. Key and Ms. Rankin 6,625 7,950 Answer is complete but not entirely correct. Amounts 3,850 $12.850 $ 3,716 $26,600 Government claims to unpaid taxesTaste-T Company has been in business for 30 years and has developed a large group of loyal restaurant customers. Down Home Foods made an offer to buy Taste-T Company for $6,000,000. Themarket value of Taste-T’s tangible assets, net of liabilities, on the date of the offer is $5,600,000.Taste-T also holds a patent for a fluting machine that the company invented (the patent with a market value of $200,000 was never recorded by Taste-T because it was developed internally). Howmuch has Down Home Foods included for intangibles in its offer of $6,000,000? Assuming TasteT accepts this offer, which company will report Goodwill on its balance sheet and at what amount?
- McCloud Drug Company owns a patent that it purchases three years ago for $2 million. The controller recently revalued the patent to its approximate market value of $ 8 million. Identify the accounting concept that was violatedConsumer Ltd, a retail company, started its operation on 1 January 2021. You have been appointed as the Chief Financial Officer of the company. To make its name familiar to the consumers, Consumer Ltd spent millions of dollars on advertising in the first year. The company CEO was worried about the negative impact of the advertising expenditure on profit of the first year. He argued for the capitalisation of the advertising expenditure as an intangible asset on the argument that advertising helps consumers to familiarised themselves with the name of the company, and the company will benefit from this. Required Evaluate whether capitalising the advertising expenditure would be the correct accounting policy under NZ IAS 38.Gaffney Corporation is a wholesale distributor of auto parts and uses the cash method of accounting. The company's sales have been about $11,175,000 per year for the last few years. However, Gaffney has the opportunity to acquire an unincorporated competitor with annual sales of $12,292,500. Complete the following paragraph regarding the accounting implications of acquiring the competitor. For the year of acquisition. Gaffney and the acquired business will be treated as o single business consider the combined gross receipts of both businesses in determining if the average annual gross receipts for the prior three-year period EV.Gaffney must Y exceed $ statutory threshold. Therefore, Gaffney will likely be able to continue using the cash method EV for the year of the acquisition.
- Klingon Widgets, Incorporated, purchased new cloaking machinery three years ago for $5.2 million. The machinery can be sold to the Romulans today for $7.4 million. Klingon's current balance sheet shows net fixed assets of $4 million, current liabilities of $830,000, and net working capital of $142,000. If all the current accounts were liquidated today, the company would receive $945,000 cash. a. What is the book value of Klingon's total assets today? Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567. b. What is the sum of the market value of NWC and the market value of fixed assets? Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567. a. Book value of total assets b. Sum of market value of NWC and fixed assetsThe partnership of Wingler, Norris, Rodgers, and Guthrie was formed several years ago as a local architectural firm. Several partners have recently undergone personal financial problems and have decided to terminate operations and liquidate the business. The following balance sheet is drawn up as a guideline for this process: Cash $ 19,000 Liabilities $ 71,000 Accounts receivable 86,000 Rodgers, loan 39,000 Inventory 105,000 Wingler, capital (30%) 126,000 Land 87,000 Norris, capital (10%) 92,000 Building and equipment (net) 170,000 Rodgers, capital (20%) 76,000 Guthrie, capital (40%) 63,000 Total assets $ 467,000 Total liabilities and capital $ 467,000 When the liquidation commenced, liquidation expenses of $14,000 were anticipated as being necessary to dispose of all property. Part A Prepare a predistribution plan for this partnership. Part B The following transactions transpire during the liquidation of the Wingler,…Black, CPA, was engaged by Franklin & Associates to give an opinion on financial statements being submitted to potential partners in an effort to expand the firm. Black completed about half of the necessary field work, but because of demands from other clients, was forced to abandon the project. As a result, prospective partners lost interest because the audit report was not available; Franklin & Associates suffered $750,000 in damages as a result. Black offered to complete the project in the future, but Franklin & Associates declined the offer. Given the circumstances, what is the probable outcome of a lawsuit between Black and Franklin & Associates? (a) Franklin & Associates will recover both punitive damages and damages for breach of contract. (b) Neither Black not Franklin & Associates will recover against the other. (c) Franklin & Associates will recover damages for breach of contract. (d) Black will receive compensation for the work already completed. I picked (d) but was…
