What is an exculpatory clause?
a. A requirement that the company pay the legal fees of directors who are sued for actions taken on behalf of the company
b. A provision that if a party enters into a contract believing in good faith that the corporation exists, he cannot later take advantage of the fact that it does not
c. A requirement that a corporation cannot undertake any transaction unless the charter permits it
d. A provision that protects directors from personal liability to the corporation and its shareholders
d
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The Code and the Restatement both contain definitions of what constitutes "unconscionable" conduct
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When dividend payout ratios are higher than ________, investors should investigate whether or not they are sustainable
A) 15% B) 25%. C) 40%. D) 75%.
On January 1, 20X1, Picture Company acquired 70 percent ownership of Seven Corporation at underlying book value. The fair value of the noncontrolling interest at the date of acquisition was equal to 30 percent of the book value of Seven Corporation. On April 25, 20X1, Seven purchased inventory from Picture for $45,000. Seven sold the entire inventory to an unaffiliated company for $58,000 on October 12, 20X1. Picture had produced the inventory sold to Seven for $38,000. The companies had no other transactions during 20X1.Based on the information given above, what amount of cost of goods sold will be reported in the 20X1 consolidated income statement?
A. $38,000 B. $13,000 C. $45,000 D. $58,000