AFM231 Chapter Notes - Chapter 15: Crowdfunding, Shelf Corporation, Startup Company

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lemonbeetle804

13 Aug 2018

School

University of Waterloo

Department

Accounting & Financial Management

Course

AFM231

Professor

Darren Charters

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Document Summary

The internal stakeholders are those who control the corporation in that they have a direct or indirect role in governing the corporation and determining its mission and how it will be achieved. External stakeholders are those who have dealings with or are affect by the corporation but do not have an explicit role in governing the corporation. There is no necessity to incorporate either federally or provincially, since provincial corporations can obtain straightforward licensing to do business in other provinces. Share in the proceeds on dissolution of the corporation, after the creditors have been paid: a class of shares may include a combination of various rights and privileges. Name three examples of typical rights that may attach to a class of shares. Other than the basic rights, three exampl es are: Preference rights; the right to receive dividends before dividends may be paid to any other class of shareholder.

Related Questions

Can you answered this question with two paragraphs. Thank you.

1. âLawyers are ordinarily prohibited from disclosing confidential client information. This attorney-client privilege is designed to permit candor between a client and their counsel. There are exceptions, however, such as when a lawyer is advised or believes a client is about to commit a crime. Still, in the corporate setting, it is rare for a lawyer to call out a client corporation. What responsibility should a corporation's lawyer have to blow-the-whistle when corporations are behaving illegally? What about the behavior of a specific officer or director? Does the fact that corporations really are not people, but are comprised of people with certain duties and roles, make any difference?

2. It is a well-established principle that corporate officers and directors have a fiduciary duty to the corporation and it's shareholders, even when it is contrary to the interests of other stakeholders (including creditors and other individuals or businesses the corporation regularly deals with). What obligations, if any, should corporate directors and officers have to third parties? What should directors and officers do when the interests of the corporation, shareholders, and creditors diverge (such as an insolvency situation)?

3. The questions of whether and who should be responsible for crimes committed by corporations are complicated and controversial. Corporate wrongdoers can be held criminally accountable under federal law and receive substantial penalties, but "white-collar" prosecutions are rare. Should corporate wrongdoers face criminal sanctions? Should the federal government vigorously enforce such laws? What effectives, if any, might this have on business in the future?

QUESTION 1 The knowledge of financial accounting can assist people with decisions such as whether to extend credit to a business. True False 0.2 points Saved QUESTION 2 Employees of a company would not have a reason to use the information provided by financial accounting. True False 0.2 points Saved

QUESTION 3 Financial accounting should be used for assessing the financial health of large organizations only. True False 0.2 points Saved

QUESTION 4 Financial accounting can be helpful for a job candidate who is assessing the financial future of a potential employer. True False 0.2 points Saved QUESTION 5 Lenders might use the information produced by financial accounting when making loan decisions. True False 0.2 points Saved

QUESTION 6 Credit analysts prefer not to use information provided by financial accounting, as it is not accurate. True False 0.2 points Saved

QUESTION 7 Financial accounting is helpful to investment advisors. True False 0.2 points Saved

QUESTION 8 Financial accounting is more useful than managerial accounting. True False 0.2 points Saved

QUESTION 9 The decision to buy or rent equipment is an example of a decision aided by managerial accounting. True False 0.2 points Saved

QUESTION 10 Which of the following statements is true of financial accounting? A. It is used by external parties to make investment decisions. B. It is used to make lease or purchase decisions. C. Managerial accounting is another name for financial accounting, D. It is primarily used to make internal decisions of a business. E. The effectiveness of advertising can be judged using financial accounting. 0.2 points Saved QUESTION 11 The charge for using money over time, often associated with long-term loans, is known as: A. interest. B. principal. C. distribution charge. D. cash dividend. E. preferred dividend. 0.2 points Saved QUESTION 12 Which of the following is a common feature of financial and managerial accounting? A. Both have same objectives B. Both are prepared according to U.S. GAAP C. Both are reported at year end in the annual report D. Both are analyzed by external users while making investment decisions E. Both are used by the management in making decisions 0.2 points Saved

QUESTION 13 Dividends are required to be paid to stockholders on an annual basis. True False 0.2 points Saved

QUESTION 14 An individual who owns one or more shares of stock in a corporation is an owner of that corporation. True False 0.2 points Saved

QUESTION 15 Corporations do not exist as separate legal entities apart from their owners. True False 0.2 points Save Answer

QUESTION 16 It is very difficult to buy or sell ownership shares of a corporation in a stock exchange. True False 0.2 points Saved

QUESTION 17 Stock markets match up investors who wish to buy shares with those who wish to sell them. True False 0.2 points Saved

QUESTION 18 Legal process by which owners of an organization apply to a state government to have it identified as an entity legally separate from its owners is called: A. stocking. B. filling. C. attributing. D. registration. E. incorporation. 0.2 points Saved

QUESTION 19 An advantage of ownership in a sole proprietorship over ownership in a corporation is: A. tax benefits. B. having a board of directors. C. the ability to raise capital through issuance of stock. D. separation of owner and business as legal entities. E. limited liability for debts. 0.2 points Saved

QUESTION 20 Who hires the management of a corporation? A. Stockholders B. Board of directors C. Creditors D. Government E. SEC 0.2 points Saved QUESTION 21 Inventory refers to the: A. excess amount paid for an asset over its fair value. B. intangible assets of a business. C. merchandise bought or manufactured for the purpose of selling. D. amount of net income reinvested by company for future operations. E. revenue generated from investment. 0.2 points Saved QUESTION 22 Investors use financial information to predict whether a: A. company will recruit more employees. B. company's stock price will increase C. company has invested in buildings. D. company will pay salaries. E. company's bond price will increase. 0.2 points Saved

QUESTION 23 Financial accounting can be compared to a portrait. True False 0.2 points Saved

QUESTION 24 Financial statements provide the form and structure for the conveyance of financial information that will create a likeness of the reporting organization. True False 0.2 points Saved

QUESTION 25 The information reported in financial statements must be exact for an investor to make any decision. True False 0.2 points Saved

beigeant306

1. Identify the ethical issue within the scenario.

You will identify the ethical issue presented in the scenario.Explain in detail why the ethical issue exists and rules thatgovern the handling of the situation. You must use at least twocredible outside source that supports your assertion regarding theethical dilemma.

2. Answer each of the following questions: ï· Who will potentiallybe harmed? ï· Who will potentially benefit? ï· What (ifany) rights or claims will be violated?

In this section of your answer, you need to address thestakeholders involved in the situation. Then, you need to providean explanation of how those stakeholders will be affected. When youdiscuss who might be harmed by the situation, fully explain howthey will be harmed. When you discuss who will potentially benefit,also share in detail how they will benefit. When you discuss theviolation of rights and/or claims, give details about those rightsand/or claims and why the ethical issue will impact those rightsand/or claims.

3. Discuss your responsibility and obligations as an accountingprofessional.

In the concluding paragraph, discuss how the matter should behandled based on your responsibilities and obligations, as well asyour ethical convictions. Describe in detail why you would chooseto deal with the ethical issue in this manner, from the standpointof responsibility as an accounting professional and from an ethicalstandpoint.

For each scenario, you will create a document that answers each ofthe three requirements presented. You should format your documentusing Times New Roman 12 point font with 1â margins on all sides.Please double space your document. You must use correct APAformatting for all citations and include a separate Works Citedpage for each of the ethical scenarios. Any form of plagiarism withresult in a 0 for the entire Capstone Project and you will receivean F as your final grade in the course.

I would suggest separating each of the three requirements into 3different paragraphs. The key to doing well on this section isproviding detail. While you are only required to provide one pageof written material by the assignment instructions, please notethat you will be graded on content and fully answering (in detail)the three numbered requirements.

Scenario #1:

You are employed as an auditor at a CPA firm. One of your clientsis Camp Enterprises, a company who has become quite successful overthe past 4 years. Increases in earnings have averaged around 15%each year. The corporation is planning on a public offering ofstock in January 2016, which in turn would cause a sizeableincrease in fees for your employer. Furthermore, the additionalfinancing would fund an expansion that would bring new jobs for thecommunity, which would help to stimulate the local economy, andallow the company to diversify their products.

On October 31, 2015, as you are working on the audit for the fiscalyear ending June 30, 2015, an issue comes to your attention thatcould potentially have an effect on the significant increase inearnings for the fiscal year. A very large orderwas slated to be shipped FOB Shipping Point to Coral Creations onJuly
14, 2015. The order was completed and stored in the warehouse butwas not segregated. Management included the selling price andrelated expenses in the net income for the fiscal year ending June30, 2015. If the issue is handled in a way thatdecreases net income, Camp Enterprisesâ net income will be lowerthan the amount reported last year.

Scenario #2:

It is July 3, 2015, and you have just been hired on as a staffaccountant at Pace Corporation. You have been tasked on creatingthe financial statements for the 2nd quarter of the fiscal year,and as you create the balance sheet, you notice an account calledMiscellaneous Equipment in the amount of $395,000. This is arelatively large account balance compared to the other fixed assetaccounts, and you are a bit unsure how to classify the account forreporting purposes, since you havenât even found a depreciationschedule for the account.

In order to get more information, you go to the Controller, ScottSmith, and ask about the account. He replies, âThat account needsto be included under Property, Plant & Equipment. Because ourbusiness is cyclical, and we always show higher profits in thethird and fourth quarters of the year, we put all of our equipmentrepair expenses in that account and then expense them off when wehave more revenue to offset it in the last two quarters of theyear. This keeps us from having to show losses in the first andsecond quarters of the year, and makes all of our quarterly reportslook good. It really doesnât matter because our yearly totals areall the same regardless of how we report repair expenses in each ofthe quarters. Weâve done it this way for years, and that is how Iwant you to report it.â

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AFM231 Chapter Notes - Chapter 15: Crowdfunding, Shelf Corporation, Startup Company

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