Kelly Building Pty Ltd is registered builder. Its managing director, John, controls the company business activities. John’s wife, Marsha, is the other director but she does not concern herself with the day-to-day management of Kelly Building Pty Ltd’s business. She is aware, however, that Kelly Building Pty Ltd has severe financial problems. In June, John, on Kelly Building Pty Ltd’s behalf, purchased $150,000 worth of building supplies on 30 credit term from Collins Manufacturing Ltd. Despite numerous demands $150,000 has not been paid. In October, Collins Manufacturing Ltd successfully applied to wind up Kelly Building Pty Ltd. Explain whether the liquidator of Kelly Building Pty Ltd can make John and Marsha personally liable for their company’s unpaid debts. Can John and Marsha rely on any of the S588H defences?

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In late 2017, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of 6,000,000 shares of common stock carrying a $1 par value, and 2,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock. On January 2, 2018, 4,000,000 shares of the common stock are issued in exchange for cash at an average price of $15 per share. Also on January 2, all 2,000,000 shares of preferred stock are issued at $20 per share. Required: 1. Prepare journal entries to record these transactions. 2. Prepare the shareholders' equity section of the Nicklaus balance sheet as of March 31, 2018. (Assume net income for the first quarter 2018 was $1,800,000.) Part B During 2018, the Nicklaus Corporation participated in three treasury stock transactions: a. On June 30, 2018, the corporation reacquires 260,000 shares for the treasury at a price of $17 per share. b. On July 31, 2018, 30,000 treasury shares are reissued at $20 per share. c. On September 30, 2018, 30,000 treasury shares are reissued at $15 per share. Required: 1. Prepare journal entries to record these transactions. 2. Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30, 2018. (Assume net income for the second and third quarter was $3,300,000.) Part C On October 1, 2018, Nicklaus Corporation receives permission to replace its $1 par value common stock (6,000,000 shares authorized, 4,000,000 shares issued, and 3,800,000 shares outstanding) with a new common stock issue having a $.50 par value. Since the new par value is one-half the amount of the old, this represents a 2-for-1 stock split. That is, the shareholders will receive two shares of the $.50 par stock in exchange for each share of the $1 par stock they own. The $1 par stock will be collected and destroyed by the issuing corporation. On November 1, 2018, the Nicklaus Corporation declares a $0.19 per share cash dividend on common stock and a $0.36 per share cash dividend on preferred stock. Payment is scheduled for December 1, 2018, to shareholders of record on November 15, 2018. On December 2, 2018, the Nicklaus Corporation declares a 1% stock dividend payable on December 28, 2018, to shareholders of record on December 14. At the date of declaration, the common stock was selling in the open market at $15 per share. The dividend will result in 76,000 (0.01 x 7,600,000) additional shares being issued to shareholders. Required: 1. Prepare journal entries to record the declaration and payment of these stock and cash dividends. 2. Prepare the December 31, 2018, shareholders' equity section of the balance sheet for the Nicklaus Corporation. (Assume net income for the fourth quarter was $2,800,000.) 3. Prepare a statement of shareholders' equity for Nicklaus Corporation for 2018. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Part A Required 2 Part A Shareholders' equity Common stock Preferred stock Paid-in capital-excess of par Required 1 Part B. NICKLAUS CORPORATION Balance Sheet - Shareholders' Equity Section September 30, 2018 Paid-in capital-share repurchase Less: Treasury stock Total shareholders' equity Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30, 2018. (Assume net income for the second and third quarter was $3,300,000.) Required 2 Part B $4,000,000 O 10,000,000 ✓ 56,000,000 30,000,000 75,000 ✔ $ 100,075,000 ✔ 5,500,000 X $94,575,000 Required 1 Part C In late 2017, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of 6,000,000 shares of common stock carrying a $1 par value, and 2,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock. On January 2, 2018, 4,000,000 shares of the common stock are issued in exchange for cash at an average price of $15 per share. Also on January 2, all 2,000,000 shares of preferred stock are issued at $20 per share. Required: 1. Prepare journal entries to record these transactions. 2. Prepare the shareholders' equity section of the Nicklaus balance sheet as of March 31, 2018. (Assume net income for the first quarter 2018 was $1,800,000.) Part B During 2018, the Nicklaus Corporation participated in three treasury stock transactions: a. On June 30, 2018, the corporation reacquires 260,000 shares for the treasury at a price of $17 per share. b. On July 31, 2018, 30,000 treasury shares are reissued at $20 per share. c. On September 30, 2018, 30,000 treasury shares are reissued at $15 per share. Required: 1. Prepare journal entries to record these transactions. 2. Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30, 2018. (Assume net income for the second and third quarter was $3,300,000.) Part C On October 1, 2018, Nicklaus Corporation receives permission to replace its $1 par value common stock (6,000,000 shares authorized, 4,000,000 shares issued, and 3,800,000 shares outstanding) with a new common stock issue having a $.50 par value. Since the new par value is one-half the amount of the old, this represents a 2-for-1 stock split. That is, the shareholders will receive two shares of the $.50 par stock in exchange for each share of the $1 par stock they own. The $1 par stock will be collected and destroyed by the issuing corporation. On November 1, 2018, the Nicklaus Corporation declares a $0.19 per share cash dividend on common stock and a $0.36 per share cash dividend on preferred stock. Payment is scheduled for December 1, 2018, to shareholders of record on November 15, 2018. On December 2, 2018, the Nicklaus Corporation declares a 1% stock dividend payable on December 28, 2018, to shareholders of record on December 14. At the date of declaration, the common stock was selling in the open market at $15 per share. The dividend will result in 76,000 (0.01 x 7,600,000) additional shares being issued to shareholders. Required: 1. Prepare journal entries to record the declaration and payment of these stock and cash dividends. 2. Prepare the December 31, 2018, shareholders' equity section of the balance sheet for the Nicklaus Corporation. (Assume net income for the fourth quarter was $2,800,000.) 3. Prepare a statement of shareholders' equity for Nicklaus Corporation for 2018. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Part A Required 2 Part A Shareholders' equity Common stock Preferred stock Paid-in capital-excess of par Required 1 Part B. NICKLAUS CORPORATION Balance Sheet - Shareholders' Equity Section September 30, 2018 Paid-in capital-share repurchase Less: Treasury stock Total shareholders' equity Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30, 2018. (Assume net income for the second and third quarter was $3,300,000.) Required 2 Part B $4,000,000 O 10,000,000 ✓ 56,000,000 30,000,000 75,000 ✔ $ 100,075,000 ✔ 5,500,000 X $94,575,000 Required 1 Part C

Answer rating: 100% (QA)

The liquidating of the firm is the condition where a firm is un... View the full answer