Facts Wolford General Partnership (WGP) operates plumbing supply business which is also an exclusive supplier for certain stable construction firms. Because of its excellent reputations and services, WGP is able to an extremely profitable entity for the business. WGP uses an accrual method of accounting and has been using June 30 fiscal year for the tax report purpose after its election of §444 since its formation. WGP currently has three business partners: Eli Wolford, Ethan Wolford, and Nora Latham which owes 60%, 20%, 20% shares of the partnership, respectively. Each partner has a tax basis equal to the capital account balance plus each share of partnership liabilities. According to the balance sheet of the partnership as of June 30, …show more content…
According to the Regs. §1.708-1(b)(4), if the partnership occurs such a Technical Termination, “The partnership contributes all of its assets and liabilities to a new partnership in exchange for an interest in the new partnership; and, immediately thereafter, the terminated partnership distributes interests in the new partnership to the purchasing partner and the other remaining partners in proportion to their respective interests in the terminated partnership in liquidation of the terminated partnership, either for the continuation of the business by the new partnership or for its dissolution and winding up.” Thus, it becomes a deemed new partnership. There are groups of tax consequences followed by this Technical Termination. Depending on different areas, some of the consequences do change; otherwise remain. For instance, depreciation will be restarted under §168(i)(7). This means the deemed new partnership may use a new depreciation method. Additionally, because it is deemed new partnership, the new partnership can many new elections. For example, accounting method and tax year end. The partners or partnership should also have to pay attention to how to file their tax returns since it would be much
Speakers of Sport INC is appearing in court for the filing of a diversity suit against ProServ INC. In the suit one sport agency (Speakers) has brought about charges against another (ProServ) for tortious interference within a business relationship. Speakers INC claims that ProServ INC interfered with their representation of a highly profiled baseball catcher name Ivan Rodriguez by promising him false enrichments of money in endorsements.
“any and all Losses, debts or rights, whether fixed or contingent, known or unknown, matured or unmatured, arising out of, relating to, or in any manner connected with any facts, events or circumstances, or any actions taken, at or prior to the consummation of the transactions contemplated by the Merger Agreement that any Releasor ever had or now has against the Releasees, including any right, title and interest in and to the Shares.”
Formal corporate bankruptcy proceedings generally take on two distinct forms: Chapter 7 (liquidation) and Chapter 11 (reorganization). Under Chapter 7 liquidation, the firm is shut down by a court-appointed trustee, and the firm’s assets are liquidated and the proceeds distributed in accordance with the absolute priority rule. Chapter 7 is also referred to as a “cash auction” procedure. In Chapter 11, an organization remains in control of its business operations (known as a ‘going-concern’), but is subject to the oversight of the bankruptcy courts.
Furthermore, there agreements are now of only two years rather than of four years. These agreements which are made, these are firstly confirmed by the members of the company.
BHP Billiton is the most successful company throughout the world by using unchanged strategies in their business. They have a strategy to operate large, low cost, expandable, and upstream commodities by using raw materials, geography, different assets and market, which give them a superior marginal costs throughout economic and commodity cycles for several years. They put the security of their workers first and supporting them by providing various facilities (see appendix 1). Their diversification makes the easy cash flow system by reducing the exposure to any one commodity and give for more identifiable and great financial performances. To become more successful BHP have heaps of human resources or workforce which reflect their values and communities. They have aim to recruit and attract other people who make their organization successful and thrive on working in teams and going to their extra miles to give their best. Moreover, they are committed to meet the changing needs of their customers. They have world class portfolio of growth option that will make them able to plan for a short term and long term goals and continuing them to create value for their shareholders which BHP more powerful (BHP Billiton, 2014). By using these all measures BHP Billiton kept its solid position in the nine month period till the end of March 2014 with the record of production attained for four items and at 10 operations. In aggregate, processing expanded by 10% for throughout the period what's more is required to develop by 16% over the two years to the end of the 2015 fiscal year. For further development BHP having a plan to start new projects where they pursuing a higher rate of returns on incremental investment and increasing inter...
The value of Poor Son declined significantly since external economic conditions. It shows that the fair value of Poor Son, the emerging entity, should be way less than its book value, and the value of assets is less than the total of liabilities and claims. Additionally, Parent will receive 100% voting shares of Poor Son and have the ability to name all members of Poor Son’s board of directors. This means that existing voting shares receive less than 50% of the voting shares of the emerging entity. For that reasons, Poor Son should apply “Fresh-Start” under ASC 852-10-45-19.
Six years after deciding to be an independent public company in late 2000, Coach Inc.’s net sales had grown at a compounded annual rate of 26 percent and the stock price had increased by 1,400 percent due to a strategy keyed to a concept called accessible luxury. Coach crafted the accessible luxury category in women’s handbags and leather accessories by differentiating themselves on price, but matching competitors on styling, quality, and customer service. The accessible luxury strategy mirrors a focus (or market niche) strategy based on low costs. Coach concentrates on a narrow buyer segment and outcompetes rivals by having lower costs than rivals and thus being able to serve niche members at a lower price. Management believed that new products should be based on market research rather than on designers’ instincts. Coach utilized extensive consumer surveys and focus groups to gain insight in the market, and ultimately a competitive advantage over competition. Coach’s $200-$500 handbags appealed to both middle class consumers who now were able to afford a taste of luxury, as well as affluent consumers with the means to spend $2,000 on a handbag on a regular basis.
BHP Billiton is a diversified leading global resources company. BHP is world’s top producers of major commodities, including iron ore, metallurgical and energy coal, conventional and unconventional oil and gas, copper, aluminum, manganese, uranium, nickel and silver. The largest producer in the world, BHP Billiton Limited has reported a profit of $ 200 billion market with a market capitalization of more than (ASX BHP) recently in the six months to December 2013 announced a profit of $ 7.8 billion. The total net profit figure of BHP’s includes more than $ 140 billion since 1985 (King, 2014).
Fletchers started their business in the construction sector in 1909. Timber weatherboard house in Dunedin, New Zealand was their first project and they built it. They remain the leading construction company in New Zealand until 2001. In late 2001, they change their name The Fletcher Building Company on the stock exchange of New Zealand. Their main office is in Penrose, Auckland. They have near 20,000 employees working for them. They are dealing with mainly six different sections of construction work, heavy and light both building products, panels, and laminates distribution in New Zealand; they also distribute construction products in Australia and constructing the new big buildings there.
P&G has in place strong tool and systems like global career and skill development system that keeps track of all the trainings across the company together with the online enrollment possibility. Every employee at P&G goes through an annual work and development plan review with higher level managers.
Both parties contribute assets (money, natural resources, technology, intellectual property rights, machinery, etc.) and agree to face possible losses. The parties have a limited responsibility for the debts of the organization and the risk is shared between the parties. In most cases, one of the companies contributed capital and the second technology or resources. The control of the new company is in the hands of the party who had a more valuable contribution.
Pucek, CPA, and Glenn E. Richards, CPA, “in circumstances outside of troubled debt restructuring, the relevant accounting guidance (FASB ASC Section 470-50-40, Debt Modifications and Extinguishments) states that “extinguishment transactions between related entities may be in essence capital transactions.” If the extinguishment of debt is realized to be a capital transaction then it cannot recognize a gain or a loss. It is difficult to clearly differentiate between a capital transaction and recognition because there are little measures for this
The central purpose of writing this Case Study Analyses on The Gap, Inc. is to identify and isolate key issues and their underlying implications and offer practical solutions and plans for implementing those solutions.
Liquidation- It is the strategy of last resort, and terminates the business unit by selling its assets. Liquidation is nothing but the divestment of all the company’s business units. Shareholders and creditors experience financial losses, some of the managers and employees lose their jobs, suppliers lose a customer, and the community suffers an increase in unemployment and a decrease in tax revenues. For this reason, liquidation should be pursued only when other forms of retrenchment are not viable