Answers
Available Options are:
A. Investors' allowable investment depends on the accredited or non-accredited status.
B. Investors may invest a combined $50 million within a 12-month period.
C. Investors may invest no more than $1 million combined for the first year of the business.
Answer:
Option C. Investors may invest no more than $1 million combined for the first year of the business.
Explanation:
The non-accredited investors do not invest more than $1 million for first year. Furthermore, for Investor it also imposes investment in current business conditions which says that Investor can invest in its business with greater of:
1. $2000
2. Or the lesser of (If the net worth of Wendy is less than $100,000)
- 5% of its total income for the year
- Net worth
There is also an option which is available if the net worth of Investor exceeds above $100,000 then he can invest up to lesser of 10% of his income or net worth, otherwise he will have to follow the above conditions.
Here, it also has an upper limit, which means that the investor can not invest more than $100,000 in the subsequent year, whatever the level of net worth or income he had for the year.
This means the non-accredited investor can not invest more than $1 million.
Final answer:
Unaccredited investors can invest in new businesses, but regulations apply. Primarily, the securities need to be either registered with the SEC or meet an exemption. Two such exemptions under Regulation D are Rule 504 and Rule 506, allowing fundraising from both accredited and non-accredited investors under certain circumstances.
Explanation:
Wendy is seeking an investment from unaccredited investors for her new business. This brings her into the area of private company financing where several regulations, primarily referred to as securities laws, apply.
These laws require that securities offered or sold to investors must be either registered with the Securities and Exchange Commission (SEC) or meet an exemption. Since most startups like Wendy's do not want to bear the burden of SEC reporting requirements, they rely on exemptions to raise capital. One such exemption is Regulation D, especially Rule 504 and Rule 506.
Rule 506 allows investments from an unlimited number of accredited investors and up to 35 unaccredited investors, provided they meet 'sophisticated investor' standards. Rule 504 allows raising up to $1 million in a 12-month period, from both accredited and non-accredited investors. Nonetheless, it does not preempt state blue sky laws, meaning Wendy may need to comply with individual state laws where her investors are based.
Learn more about Investments from Unaccredited Investors here:
Related Questions
Flow of Accounts into Financial Statements The balances for the accounts that follow appear in the Adjusted Trial Balance columns of the end-of-period spreadsheet. Indicate whether each account would flow into the income statement, statement of owner's equity, or balance sheet. 1. Accounts Payable Balance sheet 2. Accounts Receivable Income statement 3. Cash Statement of owner's equity 4. Eddy Rosewood, Drawing Balance sheet 5. Fees Earned Income statement 6. Supplies Income statement 7. Unearned Rent Balance sheet 8. Utilities Expense Balance sheet 9. Wages Expense 10. Wages Payable
A project will not produce any cash flows for two years. Starting in the third year, it will produce annual cash flows of $11,900 a year for two years. The project initially costs $43,600. In Year 6, the project will be closed and as a result should produce a final cash inflow of $50,500. What is the net present value of this project if the required rate of return is 8.7 percent?
Suppose a nation has a labor force of 45.5 million workers and an unemployment rate of 6.15%. Instructions: Round your answers to two decimal places. a. How many workers in this nation are unemployed? million b. How many workers in this nation are employed? million
When banks provide information about savings accounts, they typically quote the interest rates they offer (e.g. 1%) on a...A. Per day basisB. Per month basisC. Per six months basisD. Annual basis
Answers
Answer:
It includes; Digging deeper into areas of knowledge/expertise and comparison of achievement can help foster,creat or lead to a competitive position/ advantage. Finding out, sourcing and making use of other areas or sources of knowledge and information can keep a company up to date of competitive efforts and leads to an environment for creativity, shows/ create new knowledge within the company thereby finally leading toexisting competitive advantages and going after new ones.Success is a product of failure so therefore, getting the knowledge of failure as part of the innovative process can bring good results.
Meeting goals with all flexibility and sharing of personal stories, sourcing outsiders, proving one’s self wrong will all foster a kind of fear-free searching of new ideas.
Explanation:
For firm generally, crafting, creating or bringing a strategy that gives/yields a competitive advantage over rivals is said to be the most reliable means of achieving above-average profitability and financial performance in any organization. A company can attain and have sustainable competitive advantage if and when the elements of the strategy used by the company give buyers lasting and good impression orreasons to prefer a company's products or services over those of their competitors.
Strategic approaches used by company to build a competitive advantage includes; Focusing on a narrow market environment (niche) within an industry and also creating an advantage based on offering more value for the money e.t.c.
Answers
Corporate limited liability refers to a legal concept that separates the assets and liabilities of a corporation from those of its owners (shareholders). In essence, it means that the personal assets of shareholders are protected from the debts and liabilities of the corporation.
If the corporation incurs losses or is faced with legal claims, the shareholders are generally not personally responsible for covering these losses beyond the extent of their investment in the company. Their liability is limited to the amount they have invested in the form of shares.
This protection encourages individuals to invest in corporations without fear of losing their personal assets in case the company faces financial difficulties or legal issues.
However, it's important to note that limited liability does not shield shareholders from all liabilities; there are exceptions, such as instances of fraud or illegal activities.
Nevertheless, for most business activities, limited liability is a fundamental principle that encourages entrepreneurship and investment in corporate entities while mitigating personal financial risk for shareholders.
For more such questions on Corporate limited liability
#SPJ6
Answer: the extent of the assets of the corporation. Limited liability means that corporate owners (stockholders) and limited partners are responsible for losses only up to the amount they invest. Their other personal property is not at risk.
Explanation:
Answers
Answer:
$104,000
Explanation:
Note: The full question is attached as picture below
Fair value of net assets = Cash and receivables + Inventory + Land + Buildings (net) + Equipment (net) - Liabilities
Fair value of net assets = $70,000 + 210,000 + 240,000 + 270,000 + 90,000 - 420,000
Fair value of net assets = $460,000
Purchase consideration paid = 12,000*$47
Purchase consideration paid = $564,000
Goodwill recognized = Purchase consideration - Fair value of net assets
Goodwill recognized = $564,000 - $460,000
Goodwill recognized = $104,000
b. Journalize the adjusting entry on December 31 for the amortization of the patent rights.
c. Journalize the adjusting entry on December 31 for the impaired goodwill.
Answers
Answer:
April 1
Debit : Patent $1,500,000
Credit : Cash $1,500,000
December 31
Debit : Amortization $125,000
Credit : Accumulated Amortization $125,000
December 31
Debit : Impairment loss $6,000,000
Credit : Accumulated Impairment loss $6,000,000
Explanation:
Both the Amortization and Impairment loss reduce the value of assets. They are therefore expenses accounted in Income Statement.
Amortization : is the loss of value of an asset due to passage of time.
Amortization Expense = (Cost - Residual Amount) ÷ Useful Life
= ( $1,500,000 - $ 0) ÷ 12
= $125,000
Impairment loss : is the excess of the Carrying Amount of an Asset over its Recoverable Amount( Higher of Value in Use and Fair Value less Cost to Sell)
Final answer:
The student’s questions are regarding three transactions under business accounting: the acquisition of a patent, amortization of the patent rights, and impairing goodwill. Each requires different treatments in journalizing and adjusting entries.
Explanation:
The subject pertains to accounting and how to journalize transactions in business. Thus, it falls under the Business category and the complexity suggests it's at the College level.
To record the acquisition of the patent worth $1,500,000, you would first debit (increase) the Patents account and then credit (decrease) the Cash or Payables account. This aligns with the concept accounting for patents.
To journalize the adjusting entry for the amortization of the patent rights on December 31, divide the $1,500,000 over its 12 years useful life, which calculates to $125,000 each year. On December 31, debit (increase) the Amortization Expense account for $125,000 and credit (decrease) the Patents account for $(125,000).
To journalize the adjusting entry on December 31 for the impaired goodwill of $6,000,000, you would debit (increase) the Impairment Loss account for $6,000,000, and then credit (decrease) the Goodwill account for $6,000,000. This represents impaired goodwill recording.
Learn more about Accounting for Patents and Goodwill here:
#SPJ11
Answers
Answer:
10.22%
Explanation:
Data provided in the question:
Assets of Chang corp. = $375,000
Sales = $550,000
Net income = $25,000
Net Income required at 15% ROE = 15% × $375,000
= $56,250
Therefore,
The profit margin =
or
The profit margin =
or
The profit margin = 10.22%
Answer:
Profit Margin = 10.227%
Explanation:
Given:
Total Assets = $375,000(Common equity)
Sales = $550,000
Net Income = $25,000
Return on equity = 15% = 15/100 = 0.15
Profit margin = ?
Computation of profit margin:
Profit margin = (Common Equity × Return on equity) / Sales
Profit Margin = ($375,000 x 0.15) / $550,000
Profit Margin = ($56,250) / $550,000
= 0.102272
Profit Margin = 10.227% (approx)
Answers
=26000-18000
=8000