Explain the primary advantages of corporate form of business.

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Answer 1

Question

Chapter 11, Problem 1Q

To determine

Explain the primary advantages of corporate form of business.

Expert Solution & Answer

Explanation of Solution

Corporation: A business concern where there is a separate legal entity and are owned by stockholders are classified as corporation. Transfer of ownership and raising funds are easy in this form of organization. No personal legal liability exists among the shareholders.

The primary advantages of corporate form of business are as follows:

Transferability of ownership is easy in the corporate form of business.
Stockholders has limited liability, and they are not liable for corporation’s debts.
Investors can purchase or sale their shares in small quantities.

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Perreth Drycleaners has capacity to clean up to 5,000 garments per month. Requirements 1. Complete the schedule below for the three volumes shown. 2. Why does the average cost per garment change? 3. Suppose the owner, Dale Perreth, erroneously uses the average cost per unit at full capacity to predict total costs at a volume of 2,000 garments. Would he overestimate or underestimate his total costs? By how much? Requirement 1. Complete the following schedule for the three volumes shown. (Round all unit costs to the nearest cent and all total costs to the nearest whole dollar.) Total variable costs Total fixed costs Total operating costs Variable cost per garment Fixed cost per garment 2,000 Garments 3,500 Garments 5,000 Garments $ 2,800 2.00 Average cost per garment Requirement 2. Why does the average cost per garment change? The average cost per garment changes as volume changes, due to the component of the dry cleaner's costs. The cost per unit decreases as volume , while the variable…

Answer 2

Question

Chapter 11, Problem 1Q

To determine

Explain the primary advantages of corporate form of business.

Expert Solution & Answer

Explanation of Solution

Corporation: A business concern where there is a separate legal entity and are owned by stockholders are classified as corporation. Transfer of ownership and raising funds are easy in this form of organization. No personal legal liability exists among the shareholders.

The primary advantages of corporate form of business are as follows:

Transferability of ownership is easy in the corporate form of business.
Stockholders has limited liability, and they are not liable for corporation’s debts.
Investors can purchase or sale their shares in small quantities.

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Answer 3

Question

Chapter 11, Problem 1Q

To determine

Explain the primary advantages of corporate form of business.

Expert Solution & Answer

Explanation of Solution

Corporation: A business concern where there is a separate legal entity and are owned by stockholders are classified as corporation. Transfer of ownership and raising funds are easy in this form of organization. No personal legal liability exists among the shareholders.

The primary advantages of corporate form of business are as follows:

Transferability of ownership is easy in the corporate form of business.
Stockholders has limited liability, and they are not liable for corporation’s debts.
Investors can purchase or sale their shares in small quantities.

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Answer 4

Question

Chapter 11, Problem 1Q

To determine

Explain the primary advantages of corporate form of business.

Expert Solution & Answer

Explanation of Solution

Corporation: A business concern where there is a separate legal entity and are owned by stockholders are classified as corporation. Transfer of ownership and raising funds are easy in this form of organization. No personal legal liability exists among the shareholders.

The primary advantages of corporate form of business are as follows:

Transferability of ownership is easy in the corporate form of business.
Stockholders has limited liability, and they are not liable for corporation’s debts.
Investors can purchase or sale their shares in small quantities.

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Answer 5

Chapter 11, Problem 1Q

To determine

Explain the primary advantages of corporate form of business.

Expert Solution & Answer

Explanation of Solution

Corporation: A business concern where there is a separate legal entity and are owned by stockholders are classified as corporation. Transfer of ownership and raising funds are easy in this form of organization. No personal legal liability exists among the shareholders.

The primary advantages of corporate form of business are as follows:

Transferability of ownership is easy in the corporate form of business.
Stockholders has limited liability, and they are not liable for corporation’s debts.
Investors can purchase or sale their shares in small quantities.

Answer 6

Chapter 11, Problem 1Q

To determine

Explain the primary advantages of corporate form of business.

Expert Solution & Answer

Explanation of Solution

Corporation: A business concern where there is a separate legal entity and are owned by stockholders are classified as corporation. Transfer of ownership and raising funds are easy in this form of organization. No personal legal liability exists among the shareholders.

The primary advantages of corporate form of business are as follows:

Transferability of ownership is easy in the corporate form of business.
Stockholders has limited liability, and they are not liable for corporation’s debts.
Investors can purchase or sale their shares in small quantities.

Answer 7

Chapter 11, Problem 1Q

To determine

Explain the primary advantages of corporate form of business.

Answer 8

Expert Solution & Answer

Explanation of Solution

Corporation: A business concern where there is a separate legal entity and are owned by stockholders are classified as corporation. Transfer of ownership and raising funds are easy in this form of organization. No personal legal liability exists among the shareholders.

The primary advantages of corporate form of business are as follows:

Transferability of ownership is easy in the corporate form of business.
Stockholders has limited liability, and they are not liable for corporation’s debts.
Investors can purchase or sale their shares in small quantities.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Ch. 11 - Prob. 1Q Ch. 11 - Prob. 2Q Ch. 11 - Prob. 3Q Ch. 11 - Explain each of the following terms: (a)...Ch. 11 - What are the differences between common stock and...Ch. 11 - What is the distinction between par value and...Ch. 11 - What are the usual characteristics of preferred...Ch. 11 - What items are included in Accumulated Other...Ch. 11 - What is treasury stock? Why do corporations...Ch. 11 - How is treasury stock reported on the balance...

Explain the primary advantages of corporate form of business.

Explain the primary advantages of corporate form of business.

Explanation of Solution

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