A and B form the equal AB partnership. A is a cash basis individual taxpayer and B isan accrual basis taxpayer. As an individual, long-term capital gains will be taxed at apreferential rate for A. The AB partnership expects to have equal amounts of ordinaryincome and capital gains every year. The partnership agreement provides that A willbe allocated all of the capital gains and B will be allocated all of the ordinary income.Capital accounts are properly maintained, any distributions in liquidation will be madein accordance with each partners capital account, and both partners are required torestore deficit capital accounts upon liquidation. Will this allocation have substantialeconomic effect?AWhy or why not?

The allocation described in the partnership agreement does not have substantial economic effect. To…

Answered: A and B form the equal AB partnership.…

Principles Of Marketing

17th Edition

ISBN:9780134492513

Author:Kotler, Philip, Armstrong, Gary (gary M.)

Publisher:Kotler, Philip, Armstrong, Gary (gary M.)

Chapter1: Marketing: Creating Customer Value And Engagement

Section: Chapter Questions

Problem 1.1DQ

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explain and give examples of each i. Fixed chargesii. Preference sharesiii. Registration of chargesiv. No par valuev. Capital maintenance
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Brent is a very talented accountant with ambitions to become the general manager of his firm.The directors advise Brent that he will be promoted as soon as he obtains a Master of BusinessAdministration degree at his own expense. Brent spends a considerable sum of money and everyspare minute of his life studying and manages to finish the qualification within two years.Although the directors know about Brent’s graduation they appoint someone else as generalmanager.Explain whether Brent would succeed in a legal action based on promissory estoppelagainst the company. Use the IRAC method to answer the question.
Companies A and B differ only in their capital structure. A is financed 30% debt and 70% equity: B is financed 10% debt and 90% equity. The debt of both companies is risk-free. a. Rosencrantz owns 1% of the common stock of A. What other investment package would produce identical cash flow for Rosencrantz? b. Guildenstern owns 2% of common stock of B. What other investment package would produce identical cash flows for Guildenstern?
James and John are directors of ‘Cakes & Frozen Novelties Company Limited.’ Peter, Paul andDavid are shareholders. The company has been in operation for four years. The company has notmade any profits since its inception but James and John decided to declare dividends from thecompany’s capital reserves. The company has 10 million shares that were not distributed. Jameswent ahead and sold the shares to his wife, who is not currently a member of the company.Peter enquired as to whether or not the company can just purchase the shares issued, as there aremany different types of shares available. Paul noted that this is possible but pointed out thatRedeemable shares have particular features and certain procedures must be followed in order toredeem. He also stated three ways in which the company must finance these redeemable shares.James asked about the effect of the redeemable shares. John was puzzled and asked how acompany can redeem its share capital, especially when there is a…
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P&G PHI M LIFE An AIA Group Company MERALCO SAN MIGUEL CORPORATION Assessment Wite true if the statement is correct and write false if not Al crporaters are subsribers but subsuribers need not be an incorporator 2. The Corporate Treasurer of a corporation must be a director. Death of shareholder will not dissalve the corporation 4 A corporation can come into existence by mere agreement of the parties as in the case of partnerships S Acorporation is created by agreement of the sharehalders. The paid-up capital of a Plippine corporation must not be less than Php S00.00. 7Any Individual shareholden in a corporation may personally be held lable for all debts Inuered by the corporation L Al incerporators are corporators of a corporation. S A corporatlen has continulty of existence which permits the business to continue epardiess of changes in ownership or the death of shareholders 10 Acorportatien or a partnership can be a Incorporator but not a corporator. 11. Corparate Secretary must be a…
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Globex Corp. has 1000 shareholders as of 31 Dec 2019. On that date Globex Corp released its earnings. The earnings for the period is $1 million. The management decided to distribute all the earnings to the shareholders. On 25th March 2020 Globex Corp issued another 1000 shares to a new set of shareholders. On 31 Dec 2020 Globex Corp reported earnings of $1 million. The management again decided to distribute all its profit to shareholders. i. What is the dividend per share on 31 Dec 2019? ii. What is the dividend per share on 31 Dec 2020?- iii. How does the dividend per share on 31 Dec 2020 affect the old shareholders? Explain clearly.

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