Llabillty comparlsons Merideth Harper has invested $25,000 in Southwest Development Company. The firm has recently declared bankruptcy and has $60,000 in unpaid debts. Explain the nature of payments, if any, by Merideth in each of the follawingsituations.a. Sauthwest Develapment Company is a sole proprietorship owned by Ms. Harper.b. Southwest Development Campany is a 50-50 partnership of Merideth Harper and Christapher Blacka. If Southwest Develapment Company is a sole praprietarship owned by Ms. Harper: (Select the best answer below.)O A. Ms. Harper has limited iability, which is the amount of $80,000 in unpaid debts.O B. Ms. Harper has unlimited liability, which means creditors can claim against her personal assets.C.O D.Ms. Harper has limited liability, which guarantees that she cannot lose more than the $25,000 she invested.Ms. Harper has unlimited liability, which means creditors can only claim against the S25 000 she invested

Hi, Im answering part a) alone since the options for a) part alone is asked in the question. Kindly…

Answered: Llabillty comparlsons Merideth Harper…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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During the current year, Tristan sells land to Orange Corporation for $185,000. Tristan purchased the land for investment in 2002 for $207,500. Orange Corporation is owned as follows: (Click the icon to view the ownership of Orange Corporation.) Tristan and Jay are equal partners in a separate entity, TJ Partnership. Read the requirements. Requirement a. What is Tristan's constructive ownership in Orange Corporation? Complete the table below to determine Tristan's constructive ownership in Orange Corporation. (Enter percentages as whole percent, X%. Enter a "0" for ownership with a zero percentage.) Owner Tyson (Tristan's son) Jay (Tristan's cousin) Jay's father (Tristan's uncle) Ann (Tristan's wife) Nikki (Ann's sister) Total Percentage Ownership 5% 15% 25% 30% 25% 100% Tristan's contructive ownership (%) % % % % % %
2. In 2020 Gouda owns 60% of Cheddar & Associates. Cheddar & Associates is an accounting firm and distributes to Gouda $250,000. The firm has sales income of 4,200,000 and operating expenses of $1,500,000. They also have $25,000 long term capital gain income. The firm has property with an unadjusted basis of $400,000 and paid W2 wages for the year of $400,000. Gouda is single and his taxable income (excluding any income from Cheddar & Associates) is $450,000. For each independent scenario below how the entity will be taxed and how Gouda' return will be affected by the income from Cheddar & Associates. a) Cheddar & Associates is a C-Corporation b) Cheddar & Associates is an S- Corp c) Cheddar & Associates is a Sole Proprietorship and Gouda owns 100% d) How would your answer change (or not) in part b if they were a manufacturing company instead of a law firm?
6. The stock in Black Corporation is owned by Joseph and Elizabeth, who are unrelated. Joseph owns 80% and Elizabeth owns 20% of the stock in Black Corporation. The following assets are to be distributed in complete liquidation of Black Corporation: Cash Inventory Equipment Adjusted Basis Fair Market Value $300,000 $300,000 75,000 100,000 200,000 100,000 a. What gain or loss would Black Corporation recognize if it distributes the cash and equipment to Joseph and the inventory to Elizabeth? b. What gain or loss would Black Corporation recognize if it distributes the cash and inventory to Joseph and the equipment to Elizabeth?
The following are the liabilities and equity section of BEE Partnership at the time of liquidation: Liabilities P300,000, Loan- Ella, P20,000, Bea, Capital (30% P/L ratio), P60,000, Ella, Capital (40% P/L ratio), P40,000, Emma, Capital (30% P/L ratio), P80,000. Cash at the time of liquidation amounting P90,000. The following takes place at that time: The partners agreed that Bea will receive inventory and Emma will receive equipment before cash distribution. At that time, inventory has a book value of P4,000 but only realizable to P3,000, and equipment having a book value of P33,000 but revalued to P28,000. All other noncash assets were realized amounting P210,000 cash, but P10,000 of the cash proceeds were expensed for the liquidation process. Only Ella is solvent at that time. Required: Prepare the journal entry of the partnership dissolution.
Ee 422.
A VIE has three equity holders, Equity Holder 1 owns 20% of the C/S. Equity holder 2 owns 30% of the C/S and equity holder 3 owns 50% of the C/S. Each of the equity holders has 2 votes on a 6-person board. The board makes all decisions affecting the VIE’s policies and practices. Determine which party, if any, is the primary beneficiary and explain briefly why.
1. Bonnie, Olivia, Warren and Andy form Lobster Corporation with the following investments: Basis to Shares Transferor FMV Issued From Bonnie- Personal services rendered to Lobster Corporation $ -0- $30,000 30 From Olivia- Equipment $345,000 $300,000 270 From Warren- Cash Unrealized accounts receivable $60,000 -0- $60,000 90,000 150 From Andy- Land and building Mortgage on land and building $210,000 300,000 $450,000 300,000 150 The mortgage transferred by Andy is assumed by Lobster Corporation. The value of each share of Lobster Corporation stock is $1,000. Olivia receives $30,000 cash in addition to the 270 shares. Required: What are the tax consequences (i.e. realized gain/loss; recognized gain/loss; basis) to each of the transferors and Lobster Corporation as a result of the formation?
Liability comparisons Nerissa Smith has invested $25,000 in Northeast Productions Company. The firm has recently declared bankruptcy and has $60,000 in unpaid debts. Explain the nature of Nerissa's personal liabilit , if any, in each of the following situations. a. Northeast Productions Company is a sole proprietorship owned by Ms. Smith. b. Northeast Productions Company is a 50-50 general partnership of Nerissa Smith and Roger Brown. c. Northeast Productions Company is a limited partnership where Nerissa Smith is a limited partner. d. Northeast Productions Company is a corporation. 1) If Northeast Productions Company is a 50-50 partnership of Nerissa Smith and Roger Brown,: (Select the best answer below.) A.Ms. Smith has unlimited liability, which means creditors can only claim against the $25,000 she invested. B.Ms. Smith has limited liability, which is $30,000, or half of the $60,000 in unpaid debts. C.Ms. Smith has unlimited liability, which means creditors…
Carney, Pierce, Menton, and Hoehn are partners who share profits and losses on a 4:3:2:1 basis, respectively. They are beginning to liquidate the business. At the start of this process, capital balances are
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