(a)
Corporation: A business concern where there is a separate legal entity, and are owned by shareholders, are classified as corporation. Transfer of ownership and raising funds are easy in this form of organization. The liabilities of the stockholders to its creditors is limited up to their invested capital amount in the corporation.
To explain: Separate legal existence
(a)
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Explanation of Solution
A Corporation has a separate legal existence. It means that the ownership and management are two separate bodies in a corporation. It is not identified by the name of the owners rather identified by its own name. The real owners of the corporation are the shareholders who invests money in the corporation. However, they do not participate in the management of the corporation’s business activities.
(b)
To explain: Limited liability of stockholders
(b)
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Explanation of Solution
The liability of a corporation is limited. It means that the liability of a stockholders is limited only to the extent of their investment amount. This is because, a corporation is a separate legal entity. Thus, the corporation is liable to settle all its debts and obligations from the assets available in the corporation.
(c)
To explain: Transferable ownership rights
(c)
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Explanation of Solution
The stockholders gain ownership of a corporation by buying its shares. Being the owners, the stockholders have the complete right to sell a part or all of their shares and thus, easily transfer their ownership to another party without disturbing the normal business operations of a corporation.
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Chapter 11 Solutions
FIN. ACCT.-TOOLS FOR BUS.DEC.MAKING-CODE
- Subject:-- financial accountingarrow_forwardBlossom Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are estimated to total $293,250 for the year, and machine usage is estimated at 127,500 hours. For the year, $328,440 of overhead costs are incurred, and 132,600 hours are used. Manufacturing overhead rate $ Manufacturing Overhead $ -23,460 2.3 per machine hour Underapplied Prepare the adjusting entry to assign the under- or overapplied overhead for the year to cost of goods sold. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Creditarrow_forward1. Country Income Tax Acts Section # List of Items in emoluments Trinidad and Tobago Barbados Guyana St. Vincent and the Grenadines Antigua and Barbuda St. Lucia St. Kitts and Nevis Bermuda Anguilla Jamaica Aruba Martinique For the countries listed in the table above, search the respective Income Tax Acts and identify the sections that deal with emoluments. List the items that should be included in the emoluments as determined by the respective Acts. 2. Peter Small is an Accountant at Jumbo Products Ltd. (Jumbo). He receives an annual salary of $1,080,000. Although Peter does not require a cellular phone to effectively perform his duties, his employer provides him with one and agrees to pay a maximum bill of $30,000 per year. For the year, Peter’s cellular phone bill totals $38,100. He receives $4,500 per month for entertainment.…arrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeBusiness/Professional Ethics Directors/Executives...AccountingISBN:9781337485913Author:BROOKSPublisher:CengageEBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
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