Angel Macias is considering selling his business (organized as Theta Corporation), which has the following assets and

Question:

Angel Macias is considering selling his business (organized as Theta which has the following assets and liabilities:

Theta€™s balance sheet also shows $200,000 of accounts payable and $400,000 in bank loans. No NOL carryovers or carrybacks are available. Bill Jones and Sam Smith, each of whose net worth exceeds $1 million, are interested in acquiring the business by using S&J Corporation as the vehicle for making the acquisition. Theta€™s management and its owners are interested in selling the business. What advice would you give Bill and Sam about acquiring the assets directly from Theta, or by acquiring Theta stock from its shareholders and then liquidating Theta into S&J? Bill and Sam also have expressed concern about possible differences in the financial reporting of a nontaxable versus a taxable acquisition.

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...