Persons C, O, and T want to establish a business of digital tablets. Person P tells that he will be in favor for the formation of the corporation. P enters into a contract with O for purchasing a piece of land. Person O is not aware of the way a corporation is formed at the time of signing the contract. P makes a contract with person B to construct a small plant on the property. The contract with person B is conditional on the formation of the corporation. The P secures all necessary documents and capitalization. P filed the articles of incorporation of the corporation. To find: The liability of the corporation and person P for contracts signed with person O and person B.

Question

Can you explain the correct methodology to solve this financial accounting problem?

Answer 1

Question

Chapter 18, Problem 1BS

(a)

Summary Introduction

Case summary: Persons C, O, and T want to establish a business of digital tablets. Person P tells that he will be in favor for the formation of the corporation. P enters into a contract with O for purchasing a piece of land. Person O is not aware of the way a corporation is formed at the time of signing the contract. P makes a contract with person B to construct a small plant on the property. The contract with person B is conditional on the formation of the corporation. The P secures all necessary documents and capitalization. P filed the articles of incorporation of the corporation.

To find:The liability of the corporation and person P for contracts signed with person O and person B.

(b)

Summary Introduction

Case summary: Persons C, O, and T want to establish a business of digital tablets. Person P tells that he will be in favor for the formation of the corporation. P enters into a contract with O for purchasing a piece of land. Person O is not aware of the way a corporation is formed at the time of signing the contract. P makes a contract with person B to construct a small plant on the property. The contract with person B is conditional on the formation of the corporation. The P secures all necessary documents and capitalization. P filed the articles of incorporation of the corporation.

To find: The liability of the corporation to the contract of person B once it is formed.

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Answer 2

Question

Chapter 18, Problem 1BS

(a)

Summary Introduction

Case summary: Persons C, O, and T want to establish a business of digital tablets. Person P tells that he will be in favor for the formation of the corporation. P enters into a contract with O for purchasing a piece of land. Person O is not aware of the way a corporation is formed at the time of signing the contract. P makes a contract with person B to construct a small plant on the property. The contract with person B is conditional on the formation of the corporation. The P secures all necessary documents and capitalization. P filed the articles of incorporation of the corporation.

To find:The liability of the corporation and person P for contracts signed with person O and person B.

(b)

Summary Introduction

Case summary: Persons C, O, and T want to establish a business of digital tablets. Person P tells that he will be in favor for the formation of the corporation. P enters into a contract with O for purchasing a piece of land. Person O is not aware of the way a corporation is formed at the time of signing the contract. P makes a contract with person B to construct a small plant on the property. The contract with person B is conditional on the formation of the corporation. The P secures all necessary documents and capitalization. P filed the articles of incorporation of the corporation.

To find: The liability of the corporation to the contract of person B once it is formed.

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Answer 3

Question

Chapter 18, Problem 1BS

(a)

Summary Introduction

Case summary: Persons C, O, and T want to establish a business of digital tablets. Person P tells that he will be in favor for the formation of the corporation. P enters into a contract with O for purchasing a piece of land. Person O is not aware of the way a corporation is formed at the time of signing the contract. P makes a contract with person B to construct a small plant on the property. The contract with person B is conditional on the formation of the corporation. The P secures all necessary documents and capitalization. P filed the articles of incorporation of the corporation.

To find:The liability of the corporation and person P for contracts signed with person O and person B.

(b)

Summary Introduction

Case summary: Persons C, O, and T want to establish a business of digital tablets. Person P tells that he will be in favor for the formation of the corporation. P enters into a contract with O for purchasing a piece of land. Person O is not aware of the way a corporation is formed at the time of signing the contract. P makes a contract with person B to construct a small plant on the property. The contract with person B is conditional on the formation of the corporation. The P secures all necessary documents and capitalization. P filed the articles of incorporation of the corporation.

To find: The liability of the corporation to the contract of person B once it is formed.

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Answer 4

Question

Chapter 18, Problem 1BS

(a)

Summary Introduction

Case summary: Persons C, O, and T want to establish a business of digital tablets. Person P tells that he will be in favor for the formation of the corporation. P enters into a contract with O for purchasing a piece of land. Person O is not aware of the way a corporation is formed at the time of signing the contract. P makes a contract with person B to construct a small plant on the property. The contract with person B is conditional on the formation of the corporation. The P secures all necessary documents and capitalization. P filed the articles of incorporation of the corporation.

To find:The liability of the corporation and person P for contracts signed with person O and person B.

(b)

Summary Introduction

Case summary: Persons C, O, and T want to establish a business of digital tablets. Person P tells that he will be in favor for the formation of the corporation. P enters into a contract with O for purchasing a piece of land. Person O is not aware of the way a corporation is formed at the time of signing the contract. P makes a contract with person B to construct a small plant on the property. The contract with person B is conditional on the formation of the corporation. The P secures all necessary documents and capitalization. P filed the articles of incorporation of the corporation.

To find: The liability of the corporation to the contract of person B once it is formed.

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Answer 5

Chapter 18, Problem 1BS

(a)

Summary Introduction

Case summary: Persons C, O, and T want to establish a business of digital tablets. Person P tells that he will be in favor for the formation of the corporation. P enters into a contract with O for purchasing a piece of land. Person O is not aware of the way a corporation is formed at the time of signing the contract. P makes a contract with person B to construct a small plant on the property. The contract with person B is conditional on the formation of the corporation. The P secures all necessary documents and capitalization. P filed the articles of incorporation of the corporation.

To find:The liability of the corporation and person P for contracts signed with person O and person B.

(b)

Summary Introduction

Case summary: Persons C, O, and T want to establish a business of digital tablets. Person P tells that he will be in favor for the formation of the corporation. P enters into a contract with O for purchasing a piece of land. Person O is not aware of the way a corporation is formed at the time of signing the contract. P makes a contract with person B to construct a small plant on the property. The contract with person B is conditional on the formation of the corporation. The P secures all necessary documents and capitalization. P filed the articles of incorporation of the corporation.

To find: The liability of the corporation to the contract of person B once it is formed.

Answer 6

Chapter 18, Problem 1BS

(a)

Summary Introduction

Case summary: Persons C, O, and T want to establish a business of digital tablets. Person P tells that he will be in favor for the formation of the corporation. P enters into a contract with O for purchasing a piece of land. Person O is not aware of the way a corporation is formed at the time of signing the contract. P makes a contract with person B to construct a small plant on the property. The contract with person B is conditional on the formation of the corporation. The P secures all necessary documents and capitalization. P filed the articles of incorporation of the corporation.

To find:The liability of the corporation and person P for contracts signed with person O and person B.

Answer 7

Chapter 18, Problem 1BS

(a)

Summary Introduction

Case summary: Persons C, O, and T want to establish a business of digital tablets. Person P tells that he will be in favor for the formation of the corporation. P enters into a contract with O for purchasing a piece of land. Person O is not aware of the way a corporation is formed at the time of signing the contract. P makes a contract with person B to construct a small plant on the property. The contract with person B is conditional on the formation of the corporation. The P secures all necessary documents and capitalization. P filed the articles of incorporation of the corporation.

To find:The liability of the corporation and person P for contracts signed with person O and person B.

Answer 8

(b)

Summary Introduction

Case summary: Persons C, O, and T want to establish a business of digital tablets. Person P tells that he will be in favor for the formation of the corporation. P enters into a contract with O for purchasing a piece of land. Person O is not aware of the way a corporation is formed at the time of signing the contract. P makes a contract with person B to construct a small plant on the property. The contract with person B is conditional on the formation of the corporation. The P secures all necessary documents and capitalization. P filed the articles of incorporation of the corporation.

To find: The liability of the corporation to the contract of person B once it is formed.

Answer 9

(b)

Summary Introduction

Case summary: Persons C, O, and T want to establish a business of digital tablets. Person P tells that he will be in favor for the formation of the corporation. P enters into a contract with O for purchasing a piece of land. Person O is not aware of the way a corporation is formed at the time of signing the contract. P makes a contract with person B to construct a small plant on the property. The contract with person B is conditional on the formation of the corporation. The P secures all necessary documents and capitalization. P filed the articles of incorporation of the corporation.

To find: The liability of the corporation to the contract of person B once it is formed.

Answer 10

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Answer 18

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Answer 21

Ch. 18 - Prob. 1RE Ch. 18 - Prob. 2RE Ch. 18 - Prob. 3RE Ch. 18 - Prob. 4RE Ch. 18 - Prob. 1IS Ch. 18 - Prob. 2IS Ch. 18 - Prob. 1BS Ch. 18 - Prob. 2BS Ch. 18 - Prob. 3BCP Ch. 18 - Prob. 4BCP

Solution Summary: The author explains the doctrine of privity to contract, which states that only the parties in contract can sue each other for breach of contract.

Chapter 18 Solutions