Arthur had been adjudicated insane. During his period of insanity, Arthur sold some
unimproved real estate to Katrina for $5,000, its fair value. Katrina did not know that Arthur
was insane. In fact, he acted perfectly normal in every way.
Arthur spends this $5,000. Arthur's
guardian learns of this transaction and sues to void the contract and recover the land. What
results?
A) Since Arthur received the fair value for his land, the contract cannot be voided.
B) The guardian can get the land back, but since Arthur has spent the $5,000, Arthur does not
need to give anything back to Katrina.
C) The guardian can get the land back, but Arthur must pay Katrina the $5,000.
D) Since Arthur was acting normally, and since Katrina did not know of his insanity, the
contract is valid.
C
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Perch Corporation has made paint and paint brushes for the past ten years. Perch Corporation is owned equally by Arnold, an individual, and Acorn Corporation. Perch Corporation has $100,000 of accumulated and current E&P. Both Arnold and Acorn Corporation have a basis in their stock of $10,000. Perch Corporation discontinues the paint brush operation and distributes assets worth $10,000 each to Arnold and Acorn Corporation in redemption of 20% of their stock. Due to the distribution, Arnold and Acorn Corporation must report:
A.
| Arnold | Acorn Corporation |
| $10,000 dividend | $8,000 capital gain |
B.
| Arnold | Acorn Corporation |
| $8,000 capital gain | $8,000 capital gain |
C.
| Arnold | Acorn Corporation |
| $8,000 capital gain | $10,000 dividend |
D.
| Arnold | Acorn Corporation |
| $10,000 dividend | $10,000 dividend |
Milton Inc., a software company, conducts Inscape's DiSC inventory assessment to evaluate its employees. The assessment reveals that there are very few employees who are calm, supportive of others, and work far ahead of any deadlines. Which DiSC category applies to the employees described in the scenario?
A. conscientiousness B. steadiness C. influence D. intelligence E. dominance
The liability of corporate stockholders is limited to the amount of their investment
Indicate whether the statement is true or false
An outlier is
a. something that happens outside the organization that does not affect production. b. always used in analyzing a mixed cost. c. something that happens inside the organization that does not affect production. d. typically not used in analyzing a mixed cost.