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ADMS 2610 Lecture Notes - Lecture 8: Fiduciary, Absolute Liability, Due Diligence

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School
York University
Department
Administrative Studies
Course
ADMS 2610
Professor
Richard Gasparini

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Document Summary

In order to acquire capital corporations issue shares which is a fraction of the ownership of the corporation. The issue price of the share established by the board of directors at the time of the sale of the share: par value. Have diminished in years or abolished: no-par value. Shares can also be classified as either: common shares. Usual form of shares issued to the shareholders who will elect the directors of the corporation: preferred shares. A corporation may also issue securities that do not represent the ownership but a debt: the debt may be either secured. By a fixed charge - attaching to specific assets of the corporation or. Floating charge which does not attach to any particular assets of the corporation but simply to the assets in general. Debenture a debt security issued that may or may not have specific assets of the corporation pledged as security for payment *page 315.

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Related Questions

Dickinson Corporation is considering the acquisition of Williston Company through the acquisition of Williston’s common stock. Dickinson Corporation will issue 15,000 shares of its $5 par common stock, with a fair value of $30 per share, in exchange for all 10,000 outstanding shares of Williston Company’s voting common stock. The acquisition meets the criteria for a tax-free exchange as to the seller. Because of this, Dickinson Corporation will be limited for future tax returns to the book value of the depreciable assets. Dickinson Corporation falls into the 30% tax bracket. The appraisal of the assets of Williston Company shows that the inventory has a fair value of $120,000, and the depreciable fixed assets have a fair value of $250,000 and a 10-year life. Any remaining excess is attributed to goodwill. Williston Company has the following balance sheet just before the acquisition: Williston Company Balance Sheet December 31, 2016

Assets Liabilities & Equities Cash $ 40,000

Current Liabilities $ 50,000

Accounts Receivable 150,000

Bonds Payable 100,000

Inventory 100,000

Common Stock ($10 par) 100,000

Depreciable Assets 210,000

Retained Earnings 250,000

Required: a. Prepare a value analysis and a determination and distribution of excess schedule. b. Prepare the elimination entries that would be made on the consolidated worksheet on the date of acquisition.

Problem 16-6 Skysong Corporation is preparing the comparativefinancial statements for the annual report to its shareholders forfiscal years ended May 31, 2017, and May 31, 2018. The income fromoperations for the fiscal year ended May 31, 2017, was $1,775,000and income from continuing operations for the fiscal year ended May31, 2018, was $2,566,000. In both years, the company incurred a 10%interest expense on $2,446,000 of debt, an obligation that requiresinterest-only payments for 5 years. The company experienced a lossfrom discontinued operations of $617,000 on February 2018. Thecompany uses a 40% effective tax rate for income taxes. The capitalstructure of Skysong Corporation on June 1, 2016, consisted of954,000 shares of common stock outstanding and 20,100 shares of $50par value, 5%, cumulative preferred stock. There were no preferreddividends in arrears, and the company had not issued anyconvertible securities, options, or warrants. On October 1, 2016,Skysong sold an additional 490,000 shares of the common stock at$20 per share. Skysong distributed a 20% stock dividend on thecommon shares outstanding on January 1, 2017. On December 1, 2017,Skysong was able to sell an additional 794,000 shares of the commonstock at $22 per share. These were the only common stocktransactions that occurred during the two fiscal years. Identifywhether the capital structure at Skysong Corporation is a simple orcomplex capital structure. Determine the weighted-average number ofshares that Skysong Corporation would use in calculating earningsper share for the fiscal year ended: Weighted-average number ofshares (1) May 31, 2017 (2) May 31, 2018 Prepare, in good form, acomparative income statement, beginning with income fromoperations, for Skysong Corporation for the fiscal years ended May31, 2017, and May 31, 2018. This statement will be included inSkysong’s annual report and should display the appropriate earningsper share presentations. (Round earnings per share to 2 decimalplaces, e.g. $1.55.) SKYSONG CORPORATION Comparative IncomeStatement For Fiscal Years Ended May 31, 2017 and 2018 2017 2018 $$ $ $ Earnings per share: $ $ $ $ Question Attempts: 0 of 5 usedSave for later Submit Answer

Tompkins Financial Corporation is a financial servicesholdingcompany headquartered in New York that offers banking,insurance, and wealth management services. It pays cash dividendsquarterly and also issues stock dividends periodically.

1. At March 31, 2012, Tompkins had 11,233, 280 issued shareswith par value of $0.10 per share and 93,433 shares held intreasury. On April 25, 2012, the company announced that its Boardof Directors approved payment of a regular quarterly cash dividendof $0.36per share, payable onMay 15, 2012, to common shareholdersof record on May 7, 2012. Assume no shares were acquried or sold bythe company after March 31. GIve the journal entry to recorddeclaration of cash dividend.

2. At December 31, 2009, Tompkins had 9,785,265 issued shareswith a par value of $0.10 per share and 81,723 shares held intreasury. On January 27,2010,the company announced that the Boardapproved payment of a regular quarterly cash dividend of $0.3091per share, payable on February 25, 2010, to common shareholders ofrecordon February 5, 2010. The Board also approved payment of a 10%stock dividend distributable on Feb 25,2010, to common shareholdersof record on February 5, 2010. The share price was $35.93 when thestockdividend was issued. Assume no shares were acquiredor sold bythe company after December 31. Prepare the journal entry to recordTompkins' stock dividend.

3. Tompkins issued 10% stock dividends in1995,2003, 2005, 2006,and 2010.In 1998 Tompkins issueda three-for-two split. If aninvestor purchased 100 shares in 1994, how many shares would theinvestor have in 2012?