ip4.docx - 1 Expansion Strategies Individual Project Phase 4 Business Expansion Strategies Martha Constance Taxation and Business

ip4.docx - 1 Expansion Strategies Individual Project Phase...

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1 Expansion Strategies Individual Project Phase 4 Business Expansion Strategies Martha Constance Taxation and Business Decisions (ACCT618-1901B-01) Doctor Ralph Palumbo July 25, 2019
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2 Expansion Strategies Introduction Jefferson Industrial Machine (JIM) is a subchapter C corporation that produces industrial machinery. They are located in the United Kingdom and the United States. They acquire their component parts from Mason Machining, Inc. In order to save the company money, JIM has decided to acquire Mason Machining, Inc. JIM intends to grow the company through acquisitions and growth of the company. JIM is giving Mason Machining, Inc. cash in the amount of $750,000 and JIM’s common stock totaling $800,000. In exchange, Mason Machining, Inc.is providing JIM with $1,775,000 of assets based on FMV, with an adjusted basis of $995,000, and liabilities totaling There are four basic types of mergers $200,000. There are four basic types of mergers conglomerate mergers, horizontal mergers, vertical mergers, and congeneric mergers[ CITATION Kho19 \l 1033 ]. The conglomerate merger occurs when products produced are completely different. Each company would have different products, customer based, and geographic[ CITATION Kho19 \l 1033 ]. They combined company will be able to offer both products to show diversification. The horizontal mergers are used to acquire the competition. This type of merger will take place when one company acquires a company with a similar product to take over the competition[ CITATION Kho19 \l 1033 ]. A vertical merger is when a company that merges with another company or supplier that when put together, they help complete a product[ CITATION Kho19 \l 1033 ]. Basically, if one company is the manufacturer and they decide to merge with a supplier or retail, it would be considered a vertical merger[ CITATION Kho19 \l 1033 ]. The congeneric merger is when two companies are in the same line of business but offer different products. The merger between JIM and Mason Machining, Inc. is between two companies that are producing products in the same line of
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