e elected vice-president and corporate secretary, respectively. While Mr. Chua, his wife and son, the manager of the planned branch of the grocery store would control the day-to-day operations of the company, he does not feel comfortable with the 50-50 sharing of the capital. What if relations with his two friends turn sour in the future? Aggressive and ambitious that Mr. Chua is, what worries him is if he further expands the grocery business in the future a

e elected vice-president and corporate secretary, respectively. While Mr. Chua, his wife and son, the manager of the planned branch of the grocery store would control the day-to-day operations of the company, he does not feel comfortable with the 50-50 sharing of the capital. What if relations with his two friends turn sour in the future? Aggressive and ambitious that Mr. Chua is, what worries him is if he further expands the grocery business in the future a

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter19: Deferred Compensation

Section: Chapter Questions

Problem 1RP

See similar textbooks

Similar questions

Mr. Chua in his plan for expansion by putting up a branch of his grocery near Cubao, has decided to take third option: incorporating under the business name, “Chua Groceries, Inc.” He figures that he needs a subscribed and paid up capital of P100 million to be submitted to the Securities and Exchange Commission (SEC). He has only P50 million cash in the bank. He invited two close friends to chip in the balance. Mr. Chua wants to be elected as president and his wife as treasurer of the company. His two friend would be elected vice-president and corporate secretary, respectively. While Mr. Chua, his wife and son, the manager of the planned branch of the grocery store, would control the day-to-day operations of the company, he does not feel comfortable with the 50-50 sharing of the capital. What it relations with his two friends turn sour in the future? Aggressive and ambitious that Mr. Chua is, what worries him is if he further expands the grocery business in the future and the two…
John asked for your help regarding his plant to invest in the Philippine Stock Exchange. Currently, he has P1,000,000 extra money which he plans to invest in Jollibee Foods Corporation, expecting that the company will continue to perform well in the future. Is it advisable for John to invest all his money in just one company? Why or why not? Discuss.
John has a great idea to setup a pie and pastie factory. He needs $200,000 to buy theequipment and to lease suitable premises for a year. He is not sure whether he should setup acompany and issue 200,000 shares to his friends, or else try to borrow $200,000 from a bank toraise those funds.Explain to him the advantages and disadvantages of both alternatives.
Hassan Mustafa has recently started his new job as a financial manager in a firm called ScanSoft. ScanSoft is developing a new process to manufacture optical disks. The development costs were higher than expected, so ScanSoft requires an immediate cash inflow of $5,200,000. To raise the required capital, the company decided to issue bonds. Since ScanSoft had no expertise in issuing and selling bonds, Hassan suggested that the company work with an investment dealer. The investment dealer bought the company's entire bond issue at a discount, and then planned to sell the bonds to the public at face value or the current market value. To ensure it would raise the $5,200,000 it required, ScanSoft plans to issue 5200 bonds with a face value of $1000 each, on January 20, 2021. Interest is paid semi-annually on July 20 and January 20, beginning July 20, 2021. The bonds pay interest at 5.5% compounded semi- annually. Hassan Mustafa realized that when the bonds mature on January 20, 2041, there…
Donatello Metals Limited is a privately owned firm that manufactures various metal products and components. Most of their customers are in the computing industry. Donatello, the owner, would like to expand the business so that he can bid on larger contracts. This requires an investment of about $500 000 to finance capital assets and about $300 000 for additional working capital. Donatello has managed the firm without debt so far. His bank suggested: A loan guarantee by Donatello Metals based on specific business assets and a personal guarantee of the debt by Donatello. The bank also stated that if there is a personal guarantee, the company will only require a review engagement. If the loan is only secured by corporate assets, an audit of the company will be required. Donatello understands the differences between the guarantees but is not sure about the difference between a review and an audit engagement. Presently, the company financial statements are prepared using a compilation…
Aquafin LLC is a company formed in the year 2000 and listed in the Muscat Securities Exchange. The company has primarily engaged in the manufacture of water purifiers and its accessories. Recently, the company has expanded its operation by taking a forward integration move. Adding on, the company is planning to start two more factories in Oman and the Senior manager (finance) Mr. Miyan Ahmed has asked to identify the possible sources of funds for the same. As per the estimate submitted by SMA team (Strategic Management Accounting team), the company requires 100,000 OMR to proceed with the proposed investments. By considering facts and figures given below you are asked to evaluate the Proposed Capital structure by answering the given questions. Abstract of the Capital structure developed by Mr. Miyan Ahmed, ACCA Source of capital Amount in OMR Equity share capital( 5000 shares at OMR 10 each) 50,000 Reserve and surplus 10,0000 12% preference shares 20,000…
Aquafin LLC is a company formed in the year 2000 and listed in the Muscat Securities Exchange. The company has primarily engaged in the manufacture of water purifiers and its accessories. Recently, the company has expanded its operation by taking a forward integration move. Adding on, the company is planning to start two more factories in Oman and the Senior manager (finance) Mr. Miyan Ahmed has asked to identify the possible sources of funds for the same. As per the estimate submitted by SMA team (Strategic Management Accounting team), the company requires 100,000 OMR to proceed with the proposed investments. By considering facts and figures given below you are asked to evaluate the Proposed Capital structure by answering the given questions. Abstract of the Capital structure developed by Mr. Miyan Ahmed, ACCA Source of capital Amount in OMR Equity share capital( 5000 shares at OMR 10 each) 50,000 Reserve and surplus 10,0000 12% preference shares 20,000 9…
Mega Corporation has been operating successfully for a number of years and needs additional capital to meets its expansion strategy. Warren Tuffett, a wealthy businessman, contributes $100 million of cash in exchange for shares in Mega. Mega will need to recognize income for the contribution. True or False?
You are the Chief Finance Officer of Pandemic Restaurant. Management has suggested of a possibility expanding the business by offering new investment facilities to the community using existing funds. Another alternative offered is to release Phpl,000,000 to fund the possible business expansion. Upon discussing with the accountant, he provided you the following information. Evaluate the company if it is worth expanding using internal funds or to grab the one million pesos offer. Also make the necessary recommendation to top management. Here is the financial statements of Pandemic Restaurant as of December 31, 2019.
Suppose Clinton decides to use $7,500 currently held as savings to make a financial investment. One method of making a financial investment is the purchase of stock or bonds from a private company. finance. Buying a share of Suppose Bayzer, a pharmaceutical firm, is selling stocks to raise money for a new lab. This practice is called Bayzer stock would give Clinton the firm. In the event that Bayzer runs into financial difficulty, will be paid first.
The Case:Hassan Mustafa has recently started his new job as a financial manager in a firm called ScanSoft. ScanSoft is developing a new process to manufacture optical disks. The development costs were higher than expected, so ScanSoft requires an immediate cash inflow of $5,200,000. To raise the required capital, the company decided to issue bonds. Since ScanSoft had no expertise in issuing and selling bonds, Hassan suggested that the company work with an investment dealer. The investment dealer bought the company's entire bond issue at a discount, and then planned to sell the bonds to the public at face value or the current market value. To ensure it would raise the $5,200,000 it required, ScanSoft plans to issue 5200 bonds with a face value of $1000 each, on January 20, 2021. Interest is paid semi-annually on July 20 and January 20, beginning July 20, 2021. The bonds pay interest at 5.5% compounded semi- annually.Hassan Mustafa realized that when the bonds mature on January 20, 2041,…
The "Your Business or Mine" is a manufacturer of high-altitude balloons in Waco, Texas. The company is planning to expand its operations in 2023 and is interested in securing a loan for Tex-Mex National Bank of Waco. Four banks were visited, and their interest rates for the 15-year loan were recorded. As someone knowledgeable about the engineering economy and capital investment justification, which bank would you recommend to this company? Bank A) 1.5% per month compounded monthly Bank B) 16.5% per year compounded continuously Bank C) 4.85% per quarter compounded monthly Bank D) 8.92% per six months compounded semiannually