Chapter 38, Problem 8Q

Jean died in a common-law state in 2023 and was survived by her husband, Loren, and three adult children. Jean's gross estate, all of which was owned solely in her name, was composed of the following assets and date of death fair market values:   Assets Values Common stock $ 4,900,000 Residence 750,000 Personal property 60,000 IRAs 3,450,000 Hummel figurines 175,000 Total Assets $ 9,335,000   Jean's only liabilities, together with their date of death balance, were as follows:   Liabilities Balance Mortgage on residence $175,000 Car loan 8,000 Total $183,000   The following is a list of all of the gratuitous transfers that Jean made during her lifetime:   2000: Placed the common stock listed above in an irrevocable trust in which she retained the right to a 5% distribution of the trust account revalued annually for 25 years with the remainder to her children at her death; the date of gift fair market value of the stock was $190,000; the value of Jean's…

Albert, Betty, and Carol own and operate the Roy Lumber Company, a limited liability partnership (LLP). Each contributed one-third of the capital, and they share equally in the profits and losses. Their LLP agreement provides that all purchases exceeding $2,500 must be authorized in advance by two partners and that only Albert is authorized to draw checks. Unknown to Albert or Carol, Betty purchases on the firm’s account a $5,500 diamond bracelet and a $5,000 forklift and orders $5,000 worth of logs, all from Doug, who operates a jewelry store and is engaged in various activities connected with the lumber business. Before Betty made these purchases, Albert told Doug that Betty is not the log buyer. Albert refuses to pay Doug for Betty’s purchases. Doug calls at the mill to collect, and Albert again refuses to pay him. Doug calls Albert an unprintable name, and Albert then punches Doug in the nose, knocking him out. While Doug is lying unconscious on the ground, an employee of Roy…

At the end of 2001, Lehnhoff Inc. had $75 million in cash on its balance sheet. During 2002, the following eventsoccurred. The cash flow from Lehnhoff’s operating activities totaled $325 million. Lehnhoff issued $500 million incommon stock. Lehnhoff’s notes payable decreased by $100 million. Lehnhoff purchased fixed assets totaling $600million. How much cash did Lehnhoff Inc. have on its balance sheet at the end of 2002?

Zenith Steel Company operates a prosperous business. In January, Zenith’s chief executive officer (CEO) and president, Roe, who is also a member of the board, was voted a $1 million bonus by the board of directors for the valuable services he provided to the company during the previous year. Roe receives an annual salary of $850,000 from the company. Black, Inc., a minority shareholder in Zenith Steel Company, brings an appropriate action to enjoin the company from paying the $1 million bonus. Explain whether Black will succeed in its attempt.

Mr. B’s business is not registered as a One-Person Corporation (OPC); it is thus a single proprietorship.  Unable to pay his construction materials supplier, the latter wishes to go after said entrepreneur's vehicles at home.  Here, can said obligation of the business be paid-off through Mr. B's other assets? Briefly reason-out.

A limited partner is responsible for any debts of the partnership, regardless of whether he or she was directly involved in the transaction that created the debt.;True or False

Chapter 11 bankruptcy provides for: a. adjustment of debts of a municipality b. reorganization of a corporation c. liquidation proceedings d. adjustment of farmers' debts

a debtor fails to appear at the Chapter 7 creditors' meeting, the court may refuse to grant the bankruptcy. True False

Mikhail and Dana Jackson, doing business as M&D Enterprises, Inc., bought a retail electronics store under a franchise agreement from a national company, Tunes Hut. The Jacksons borrowed from State Bank to pay for the business and signed loan documents and a financing statement, which identified the Jacksons as "Debtors." Elsewhere on the financing statement, the bank identified "M&D Enterprises, Inc., Tunes Hut, Dana K. Jackson, Mikhail C. Jackson" as "Debtors." The statement covered, in part, the store inventory. The bank filed the financing statement with the proper government agency. Three years later, the store closed. Tunes Hut terminated the franchise and took possession of the inventory, claiming the Jacksons and M&D owed Tunes Hut $6,394.73. State Bank filed a suit in a state court against Tunes Hut, claiming a perfected security interest in the inventory with priority over Tunes Hut's claim. Did the bank's security interest take priority over Tunes Hut’s…