Answer:
a Interest paid to partners based on the amount of invested capital.
Explanation:
A partnership is formed between two parties that agree to go into a venture for mutual gain. The parties share ownership of the business entity and as such are entitled to profit from their equity holdings.
Interest paid based on invested capital is considered a distribution of profit by the business and not an expense. This is similar to sharing profit to shareholders in a company.
Legitimate expenses include: cost of sales, staff cost, administrative costs, advertising costs, and professional expenses like hiring an accountant.
Answer:
C. Buddy cannot be a creditor of the corporation after the redemption.
Explanation:
"A stock redemption that terminates a shareholder’s entire stock ownership in a corporation will qualify for sale or exchange treatment under § 302(b)(3). The attribution rules generally apply in determining whether the shareholder’s stock ownership has been completely terminated. However, the family attribution rules do not apply to a complete termination redemption if the following conditions are met:
The former shareholder has no interest, other than that of a creditor, in the corporation for at least 10 years after the redemption (including an interest as an officer, director, or employee).
The former shareholder files an agreement to notify the IRS of any prohibited interest acquired within the 10-year period and to retain all necessary records pertaining to the redemption during this time period."
Reference: South-Western, Thomson. “Chapter 5.” To Qualify for Sale or Exchange Treatment, a Stock Redemption Generally Must Result in a Substantial Reduction in a Shareholde, 2005,
Answer:
a. 2019 Operating cash flow
Welland Co. Operating Cash Flow for 2019
Particular Amount $
Sales 162500
Cost of goods sold 80000
Other Expenses 3300
Depreciation 9000 <u>92,300</u>
EBIT 70200
Less: Taxes 22295
Add :Depreciation <u>9000</u>
Operating Cash Flow $<u>56905</u>
b. Cash flow to creditors
Interest paid 6500
Add: Loan raised <u>7700</u>
Cash flow to creditors <u>14200</u>
c. Cash flow to Stockholders
Dividends Paid 8150
Less: Net Equity Raised <u>4500</u>
Cash flow to Stockholders <u>$3650</u>
d. Change in Net working Capital = Change in Current Assets - Change in Liabilities
Figures for Current Asset was not given, rather the Net Fixed asset is given $21,100 which is not a current asset.
Answer
camera and microphone with a movie and entertainment degree
Explanation:
<h3>Two ways in which can adapt to the challenges of the business environment</h3>
- Recognize the Size of the Change
- Be open to new and different ideas
Today's business concerns are more pressing than ever before. Businesses are competing on a much greater scale as a result of technical advancements and globalization. And, in light of the current economic and health crises, business owners confront an even greater challenge: prospering, not just surviving. Here are four strategies to explore in order to assist your company adjust amid difficult times.
<h3>1. Recognize the Size of the Change</h3>
- To most seasoned company and executive leaders, the word 'adapting' may sound cliché. Adaptability, on the other hand, in the context of business simply means being open to new ideas and methods. Accept that the world is changing at a quick speed, and that in order for businesses to thrive, they must adapt their strategy to meet the demands of the moment.
<h3>2. Be open to new and different ideas.</h3>
- In order to be competitive, a business owner needs understand a few things. The first step is to think about what other options you have. Consider your backup plans and procedures in case the market situation changes unexpectedly. A business owner must constantly be prepared for any kind of tweaks and changes that their company may experience, and have a contingency plan in place that can be implemented promptly.
