SignLayoutReferencesMailingsIS investigating three funding sources.ConSantana's sister Cicely is willing to invest $86,000 in the business as a commonshareholder. Because Santana currently has about $129,000 invested in thebusiness, Cicely's investment will mean that Santana will maintain about 60%ownership and Cicely will have 40% ownership of Business Solutions.Santana's uncle Marcello is willing to invest $86,000 in the business as a preferredshareholder. Marcello would purchase 860 shares of $100 par value, 7% preferredstock.• Santana's banker is willing to lend her $86,000 on a 7%, 10-year note payable. Shewould make monthly payments of $1,000 per month for 10 years.Order ChecksRequired:a) Prepare the journal entry to reflect the initial $86,000 investment under each of the options.(Clearly show debit and credit sides, while also indicating if each of the accounts isincreasing or decreasing.)ge: Since Last StatemeIncrease(Yes /No)Decrease(Yes/No)DebitАссountDebitCredit-$100.78Cash86,000Common Stock86,000-$1.88Issuance of common stockCashPreferred stock$16.55Issuance of preferred stockCash$23.62 3Notes payable-$33.00b) Evaluate the three proposals for expansion, providing the pros and cons of each option.(Minimum 70 words)c) Which option do you recommend Santana adopt? (Minimum 40 words)d) Imagine Business Solutions was not successful, but instead was accumulating losses, andthe only option was to get a $100,000, 10-year note payable to get a cash influx and keep-$32.60-$43.27-$43.17Page 1 of 2500 wordsO Focus138%tv AMacBook AirF9F10FI1

Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Santana's sister Cicely is willing to invest $86,000 in the business as a comm shareholder. Because Santana currently has about $129,000 invested in business, Cicely's investment will mean that Santana will maintain about 60 ownership and Cicely will have 40% ownership of Business Solutions. • Santana's uncle Marcello is willing to invest $86,000 in the business as a preferr shareholder. Marcello would purchase 860 shares of $100 par value, 7% preferr stock. Santana's banker is willing to lend her $86,000 on a 7%, 10-year note payable. SE would make monthly payments of $1,000 per month for 10 years. red:

Santana's sister Cicely is willing to invest $86,000 in the business as a comm shareholder. Because Santana currently has about $129,000 invested in business, Cicely's investment will mean that Santana will maintain about 60 ownership and Cicely will have 40% ownership of Business Solutions. • Santana's uncle Marcello is willing to invest $86,000 in the business as a preferr shareholder. Marcello would purchase 860 shares of $100 par value, 7% preferr stock. Santana's banker is willing to lend her $86,000 on a 7%, 10-year note payable. SE would make monthly payments of $1,000 per month for 10 years. red:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Aminah owns 1,000 shares of a firm that has just announced an increase in its dividend from $2.00 to $2.50 a share. The share price is currently $150. If Aminah does not wish to spend the extra cash, what should he do to offset the dividend increase?
X, owns an idle land worth 1M. X works in MCDO as an accounting manager. He decided to exchange the land to shares of stocks of MCDO, a domestic corp. for 10,000 shares with value of 1.2M. As a result, X obtains control, having 90% interest, in the corporation. What is the CGT?
2. Rye Corporation is owned 55% (55 shares) by Roger, 30% (30 shares) by Yolanda and 15% (15 shares) by Eric. Rye has E&P of $400,000. Roger's stock basis is $200,000, Yolanda's stock basis is $130,000 and Eric's stock basis is $80,000. a. What is the tax result to Roger if Rye redeems 30 shares for $350,000? Yolanda is Roger's wife. b. What is the tax result to Roger if Rye redeems 45 shares for $500,000? Yolanda is Roger's wife. c. What is the tax result to Roger if Rye redeems 55 shares for $600,000? Yolanda is Roger's wife.
Mary Phelps owns 2,000 of the 100,000 shares of Mega Corporation. By purchasing a minimum of the additional 50,000 shares authorized by the corporation, Mary is exercising her_ shares of
Delia and Danny are partners with capital balances of P3,000,000 and P2,000,000, respectively. They share profits and losses in the ratio of 3:2, respectively. If Dada purchased 1/4 of the equity of Danny for P900,000. How much is Danny's capital balance after Dada's admission?P1,500,000n
Sam owns 50 Class A non-voting shares of ABC Co. Leslie owns 50 Class B voting shares of ABC Co. Who has control of ABC Co? A) Sam B) Both Sam and Leslie C) Leslie D) Neither Sam nor Leslie Odinie has been an employee of ABC Co for the last 5 years. Recently, the CFO has asked all employees to incorporate and advised that their pay will now be received through their corporation instead. Odinie is a Canadian resident individual and is interested in what type of corporation his new company will be. It is established in Canada. A) Specified investment business B) Public corporation C) Personal services business D) Other corporation
Please help me
Hayden owns 100% of the shares of ABC Co. Hayden's spouse owns 100% of the shares of XYZ Co. The shares of ABC Co. are valued at $50,000 with an ACB and PUC of $1000. The couple planning for XYZ Co. to pay Hayden $50,000 in cash for the shares in ABC Co. Which of the following will result from this sale? Multiple Choice Hayden will recognize a capital gain of $49,000. Hayden will recognize a deemed dividend of $50,000 and a capital gain of $0. Hayden will recognize a deemed dividend of $49,000 and a capital gain of $0. Hayden will recognize a capital gain of $50,000.
Cerulean Corporation has two equal shareholders, Eloise and Olivia. Eloise acquired her Cerulean stock three years ago by transferring property worth $700,000, basis of $300,000, for 70 shares of the stock. Olivia acquired 70 shares in Cerulean Corporation two years ago by transferring property worth $660,000, basis of $110,000. Cerulean Corporation’s accumulated E & P as of January 1 of the current year is $350,000. On March 1 of the current year, the corporation distributed to Eloise property worth $120,000, basis to Cerulean of $50,000. Itdistributed cash of $220,000 to Olivia. On July 1 of the current year, Olivia sold her stock to Magnus for $820,000. On December 1 of the current year, Cerulean distributed cash of $90,000 each to Magnus and Eloise. What are the tax issues?
Rondo and his business associate, Larry, are considering forming a business entity called R&L, but they are unsure about whether to form it as a C corporation, an S corporation, or an LLC taxed as a partnership. Rondo and Larry would each invest $150,000 in the business. Thus, each owner would take an initial basis in his ownership interest of $150,000 no matter which entity type is formed. Shortly after the formation of the entity, the business borrowed $50,000 from the bank. If applicable, this debt will be shared equally between the two owners. a. After taking the loan into account, what is Rondo's tax basis in his R&L stock if R&L is formed as a C corporation? b. After taking the loan into account, what is Rondo's tax basis in his R&L stock if R&L is formed as an S corporation? c. After taking the loan into account, what is Rondo's tax basis in his R&L ownership interest if R&L is formed as an LLC and taxed as a partnership?