Week 3 Corporate Reorganization Discussion Post # 1

1.Which of the following statements is true concerning all types of tax-free corporate reorganizations? Assets are transferred from one corporation to another. Stock is exchanged with shareholders. Liabilities that are assumed when cash is also used as consideration will be treated as boot. Corporations and shareholders involved in the reorganization will recognize gains but not losses. None of the above statements is true.

4. Which statement is false concerning a Chapter 11 reorganization? a. b. C. d. The firm is allowed to remain in possession of its assets. Proceedings begin when the debtor firm files a petition with the bankruptcy court. Once confirmed, the plan of reorganization binds all parties. Creditors may agree to a longer payment period but do not settle for partial payment. a. answer a b. answer b c. answer c O d. answer d

Which of the following requires periodic shareholder approval of executive compensation? Multiple Choice The Smoot-Hawley Act The Sarbanes-Oxley Act The Dodd-Frank Wall Street Reform and Consumer Protection Act The Bankruptcy Abuse Prevention and Consumer Protection Act

4 POINTS

6 Fill in the blanks.   In case of a corporation, equity is subordinate to liabilities so that, when a corporation is liquidated, liabilities must be fully settled before residual assets are distributed to shareholders. Therefore, liabilities and equity are NOT ( ) ( ).   There should be two words to fill in the blanks.   I appreciate it if you could suggest several possible answers (maximum 3), as well as your best answer.

What objective of the tax system does the favorable treatment of corporate reorganizations fulfill? short answer question?

1. Which of the following does not affect retained earnings?   Choices;  Actual payment/distribution of dividends. Board of directors’ decision relating to recapitalization. Adjustment of prior period’s profits Profit of a corporation during the period.     2. The following are characteristics of a corporation except   Choices; It is an artificial being It has right of succession Unlimited Liability It is created by operation of law

Question 6 Which of the following is NOT a right possessed by common stockholders of a corporation? O a. the right to receive a minimum amount of dividends b. the right to vote in the election of the board of directors c. the right to sell their stock to anyone they choose d. the right to share in assets upon liquidation A Moving to the next question prevents changes to this answer.

4 PTS

10. As a legal entity, a corporation can perform the following functions EXCEPT: A. voteB. borrow money, lend money, sue and be sued, and vote.C. borrow money and lend money.D. borrow money, lend money, and sue and be sued. 13. A corporation, potentially, has infinite life because it A. has the same ownership and management.B. is a legal entity.C. is closely regulated.D. has limited liability.

Will an acquiring corporation recognize gain or loss when it issues its stock to acquire the assets or stock of target corporation in a reorganization? Explain how it will work. How do exchanging shareholders and security holders determine their basis for the stock and securities received in a corporate reorganization? Give an example

Required information Problem 11-47 (LO 11-2) (Algo) [The following information applies to the questions displayed below.] Assume the following S corporations, gross receipts, passive investment income, and corporate E&P. Will any of these corporations have its S election terminated due to excessive passive income? If so, in what year? All became S corporations at the beginning of year 1. (Leave no answer blank. Select "NA" if no effect.) Problem 11-47 Part c (Algo) c. Tiffany Corporation Corporate Earnings and Passive Year Gross Receipts Investment Income $ 253, 600 304, 080 403, 970 354, 070 293, 977 Profits $ 1, 001, 818 704, 000 801, 115 900, 890 672, 000 $ 0 2 3 4 5 Would the S election be terminated?

Required information Problem 11-47 (LO 11-2) (Algo) [The following information applies to the questions displayed below.] Assume the following S corporations, gross receipts, passive investment income, and corporate E&P. Will any of these corporations have its S election terminated due to excessive passive income? If so, in what year? All became S corporations at the beginning of year 1. (Leave no answer blank. Select "NA" if no effect.) Problem 11-47 Part a (Algo) a. Clarion Corporation Passive Investment Corporate Earnings Year Gross Receipts $ 1, 354, 458 1, 231, 189 1, 141, 218 1, 348, 287 1, 501, 380 Income $ 255, 000 105, 000 305, 000 355, 000 405, 000 and Profits $ 321, 900 321, 900 232, 000 101, 200 1 3 4 5 Would the S election be terminated?

If a corporation files bankruptcy and is liquidated, who should get paid first: the corporation’s bondholders or its stockholders? Why?

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! Required information Problem 11-47 (LO 11-2) (Algo) [The following information applies to the questions displayed below.] Assume the following S corporations, gross receipts, passive investment income, and corporate E&P. Will any of these corporations have its S election terminated due to excessive passive income? If so, in what year? All became S corporations at the beginning of year 1. (Leave no answer blank. Select "NA" if no effect.) Problem 11-47 Part d (Algo) d. Jonas Corporation Corporate Earnings and Profits $ 560 Passive Investment Income $ 254, 000 242, 000 234, 000 218, 570 204, 000 Year Gross Receipts $ 1, 101, 530 998, 200 800, 950 804, 000 751, 200 1 2 460 3 360 4 260 160 Would the S election be terminated?

I need answer to this accounting Question-mcq