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 find: which characteristic of a corporation is a disadvantage.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 13, Problem 1QC

To determine

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 find: which characteristic of a corporation is a disadvantage.

Expert Solution & Answer

Answer to Problem 1QC

(b) Double taxation

Explanation of Solution

Explanation for correct answer:

A corporation is entitled to double taxation. The corporation is required to pay the taxes based on its net income. In addition, the dividend income that are distributed to the shareholders are also taxable. Hence, this option is correct.

Explanation for incorrect answers:

Option (a) Mutual agency: Mutual agency is an advantage for a corporation. Unlike ,partnership and sole proprietorship, there is no mutual agency in a corporation as there is no mutual agreement between the stockholders’ and the corporation to form a corporation. The stockholders’ cannot bind the business into a contract. In a corporation form of business, the company is not liable for any unethical or immoral activities done by the stockholders. Hence, this option is incorrect.
Option (c) Limited liability: The liability of a corporation is limited and it is an adavantage. It means that the liability of a stockholders is limited only to the extent of their investment amount. They are not personally liable. 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. Hence, this option is incorrect.
Option (d) None are disadvanatages: As explained above, since double taxation is the disadvanatage of the corporation out of the given four options, this option is incorrect.

Conclusion

Hence, the correct answer is option (b).

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

16. Candy Company projects the following sales: BB (Click on the icon to view the projected sales.) Candy collects sales on account in the month after the sale. The Accounts Receivable balance on January 1 is $12,300, which represents December's sales on account. Candy projects the following cash receipts from customers: BEE (Click on the icon to view the cash receipts from customers.) Recalculate cash receipts from customers if total sales remain the same but cash sales are only 5% of the total. Begin by computing the cash sales and sales on account for each month if cash sales are only 5% of the total. January February March Cash sales (5%) Sales on account (95%) Total sales $ 31,000 $ 27,000 $ 33,000 Data table X I Data table - X January February March January February March Cash sales (10%) $ 3,100 $ 27,900 Sales on account (90%) 2,700 $ 24,300 3,300 29,700 Cash receipts from cash sales Cash receipts from sales on account $ 3,100 $ 2,700 $ 12,300 27,900 3,300 24,300 $ 31,000 $…

11. Kapper Company projects 2025 first quarter sales to be $35,000 and increase by 15% per quarter. Determine the projected sales for 2025 by quarter and in total. Round answers to the nearest dollar. 12. Fagg Company manufactures and sells bicycles. A popular model is the XC. The company expects to sell 2,100 XCs in 2024 and 2,000 XCs in 2025. At the beginning of 2024, Friedman has 380 XCs in Finished Goods Inventory and desires to h of the next year's sales available at the end of the year. How many XCs will Fagg need to produce in 2024? 11. Kapper Company projects 2025 first quarter sales to be $35,000 and increase by 15% per quarter. Determine the projected sales for 2025 by quarter and in total. Round answers to the nearest dollar. Determine the projected sales for each quarter, then compute the projected sales for 2025. Base sale amount Quarter 1 Multiplier for sales increase = Projected sales for the quarter L

15. Callarman Company began operations on January 1 and has projected the following selling and administrative expenses: (Click on the icon to view the selling and administrative expenses.) Determine the cash payments for selling and administrative expenses for the first three months of operations. (Complete all answer boxes. Enter a "0" for zero amounts.) Rent Expense Utilities Expense Depreciation Expense Insurance Expense Total cash payments for selling and administrative expenses Data tables January February March Rent Expense Utilities Expense Depreciation Expense Insurance Expense $1,400 per month, paid as incurred 800 per month, paid in month after incurred 1,000 per month 50 per month, 9 months prepaid on January 1 Print Done

Answer 2

Question

Chapter 13, Problem 1QC

To determine

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 find: which characteristic of a corporation is a disadvantage.

Expert Solution & Answer

Answer to Problem 1QC

(b) Double taxation

Explanation of Solution

Explanation for correct answer:

A corporation is entitled to double taxation. The corporation is required to pay the taxes based on its net income. In addition, the dividend income that are distributed to the shareholders are also taxable. Hence, this option is correct.

Explanation for incorrect answers:

Option (a) Mutual agency: Mutual agency is an advantage for a corporation. Unlike ,partnership and sole proprietorship, there is no mutual agency in a corporation as there is no mutual agreement between the stockholders’ and the corporation to form a corporation. The stockholders’ cannot bind the business into a contract. In a corporation form of business, the company is not liable for any unethical or immoral activities done by the stockholders. Hence, this option is incorrect.
Option (c) Limited liability: The liability of a corporation is limited and it is an adavantage. It means that the liability of a stockholders is limited only to the extent of their investment amount. They are not personally liable. 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. Hence, this option is incorrect.
Option (d) None are disadvanatages: As explained above, since double taxation is the disadvanatage of the corporation out of the given four options, this option is incorrect.

Conclusion

Hence, the correct answer is option (b).

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 13, Problem 1QC

To determine

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 find: which characteristic of a corporation is a disadvantage.

Expert Solution & Answer

Answer to Problem 1QC

(b) Double taxation

Explanation of Solution

Explanation for correct answer:

A corporation is entitled to double taxation. The corporation is required to pay the taxes based on its net income. In addition, the dividend income that are distributed to the shareholders are also taxable. Hence, this option is correct.

Explanation for incorrect answers:

Option (a) Mutual agency: Mutual agency is an advantage for a corporation. Unlike ,partnership and sole proprietorship, there is no mutual agency in a corporation as there is no mutual agreement between the stockholders’ and the corporation to form a corporation. The stockholders’ cannot bind the business into a contract. In a corporation form of business, the company is not liable for any unethical or immoral activities done by the stockholders. Hence, this option is incorrect.
Option (c) Limited liability: The liability of a corporation is limited and it is an adavantage. It means that the liability of a stockholders is limited only to the extent of their investment amount. They are not personally liable. 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. Hence, this option is incorrect.
Option (d) None are disadvanatages: As explained above, since double taxation is the disadvanatage of the corporation out of the given four options, this option is incorrect.

Conclusion

Hence, the correct answer is option (b).

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 13, Problem 1QC

To determine

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 find: which characteristic of a corporation is a disadvantage.

Expert Solution & Answer

Answer to Problem 1QC

(b) Double taxation

Explanation of Solution

Explanation for correct answer:

A corporation is entitled to double taxation. The corporation is required to pay the taxes based on its net income. In addition, the dividend income that are distributed to the shareholders are also taxable. Hence, this option is correct.

Explanation for incorrect answers:

Option (a) Mutual agency: Mutual agency is an advantage for a corporation. Unlike ,partnership and sole proprietorship, there is no mutual agency in a corporation as there is no mutual agreement between the stockholders’ and the corporation to form a corporation. The stockholders’ cannot bind the business into a contract. In a corporation form of business, the company is not liable for any unethical or immoral activities done by the stockholders. Hence, this option is incorrect.
Option (c) Limited liability: The liability of a corporation is limited and it is an adavantage. It means that the liability of a stockholders is limited only to the extent of their investment amount. They are not personally liable. 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. Hence, this option is incorrect.
Option (d) None are disadvanatages: As explained above, since double taxation is the disadvanatage of the corporation out of the given four options, this option is incorrect.

Conclusion

Hence, the correct answer is option (b).

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 13, Problem 1QC

To determine

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 find: which characteristic of a corporation is a disadvantage.

Expert Solution & Answer

Answer to Problem 1QC

(b) Double taxation

Explanation of Solution

Explanation for correct answer:

A corporation is entitled to double taxation. The corporation is required to pay the taxes based on its net income. In addition, the dividend income that are distributed to the shareholders are also taxable. Hence, this option is correct.

Explanation for incorrect answers:

Option (a) Mutual agency: Mutual agency is an advantage for a corporation. Unlike ,partnership and sole proprietorship, there is no mutual agency in a corporation as there is no mutual agreement between the stockholders’ and the corporation to form a corporation. The stockholders’ cannot bind the business into a contract. In a corporation form of business, the company is not liable for any unethical or immoral activities done by the stockholders. Hence, this option is incorrect.
Option (c) Limited liability: The liability of a corporation is limited and it is an adavantage. It means that the liability of a stockholders is limited only to the extent of their investment amount. They are not personally liable. 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. Hence, this option is incorrect.
Option (d) None are disadvanatages: As explained above, since double taxation is the disadvanatage of the corporation out of the given four options, this option is incorrect.

Conclusion

Hence, the correct answer is option (b).

Answer 6

Chapter 13, Problem 1QC

To determine

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 find: which characteristic of a corporation is a disadvantage.

Expert Solution & Answer

Answer to Problem 1QC

(b) Double taxation

Explanation of Solution

Explanation for correct answer:

A corporation is entitled to double taxation. The corporation is required to pay the taxes based on its net income. In addition, the dividend income that are distributed to the shareholders are also taxable. Hence, this option is correct.

Explanation for incorrect answers:

Option (a) Mutual agency: Mutual agency is an advantage for a corporation. Unlike ,partnership and sole proprietorship, there is no mutual agency in a corporation as there is no mutual agreement between the stockholders’ and the corporation to form a corporation. The stockholders’ cannot bind the business into a contract. In a corporation form of business, the company is not liable for any unethical or immoral activities done by the stockholders. Hence, this option is incorrect.
Option (c) Limited liability: The liability of a corporation is limited and it is an adavantage. It means that the liability of a stockholders is limited only to the extent of their investment amount. They are not personally liable. 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. Hence, this option is incorrect.
Option (d) None are disadvanatages: As explained above, since double taxation is the disadvanatage of the corporation out of the given four options, this option is incorrect.

Conclusion

Hence, the correct answer is option (b).

Answer 7

Chapter 13, Problem 1QC

To determine

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 find: which characteristic of a corporation is a disadvantage.

Answer 8

Expert Solution & Answer

Answer to Problem 1QC

(b) Double taxation

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Explanation for correct answer:

A corporation is entitled to double taxation. The corporation is required to pay the taxes based on its net income. In addition, the dividend income that are distributed to the shareholders are also taxable. Hence, this option is correct.

Explanation for incorrect answers:

Option (a) Mutual agency: Mutual agency is an advantage for a corporation. Unlike ,partnership and sole proprietorship, there is no mutual agency in a corporation as there is no mutual agreement between the stockholders’ and the corporation to form a corporation. The stockholders’ cannot bind the business into a contract. In a corporation form of business, the company is not liable for any unethical or immoral activities done by the stockholders. Hence, this option is incorrect.
Option (c) Limited liability: The liability of a corporation is limited and it is an adavantage. It means that the liability of a stockholders is limited only to the extent of their investment amount. They are not personally liable. 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. Hence, this option is incorrect.
Option (d) None are disadvanatages: As explained above, since double taxation is the disadvanatage of the corporation out of the given four options, this option is incorrect.

Answer 12

Conclusion

Hence, the correct answer is option (b).

Answer 13

Ch. 13 - Prob. 1QC Ch. 13 - Prob. 2QC Ch. 13 - Suppose Value Home and Garden Imports issued...Ch. 13 - Prob. 4QC Ch. 13 - Prob. 5QC Ch. 13 - Assume that a company paid 6 per share to purchase...Ch. 13 - Prob. 7QC Ch. 13 - A small stock dividend a. decreases common stock....Ch. 13 - Prob. 9QC Ch. 13 - Jackson Health Foods has 8,000 shares of 2 par...

Answer to Problem 1QC

Explanation of Solution

Want to see more full solutions like this?

Chapter 13 Solutions