Week 3 Chapter 15-1 (ACCT-311)

Week 3 Chapter 15-1 (ACCT-311) - CLASSCONFERENCES: CONCEPTS...

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C LASS  C ONFERENCES C ONCEPTS F OR A NALYSIS Week #3 Chapter 15 (CA 15-1): Preemptive Rights and Dilution of  Ownership Question:  Wallace Computer Company is a small closely held corporation. Eighty Percent (80%) of the stock is held by Derek Wallace, president. Of the remainder 10% is held by members of his family and 10% by Kathy Baker, a former officer who is now retired. The balance sheet of the company at June 30 th , 2010, was substantially as shown below: Assets Equity Cash $22,00 0 Current  Liabilities $50,000 Other  $450,0 00 Capital Stock $250,00 0 $472,00 0 Retained  Earnings $172,00 0 $472,000 Additional authorized capital stock of $300,000 PV had never been issued. To strengthen the cash position of the company, Wallace issued capital stock with a PV of $100,000 to himself @ par for cash. At the next stockholders’ meeting, Baker objected and claimed that her interests had been injured. Instructions:
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This note was uploaded on 10/03/2010 for the course ACCT Acct taught by Professor Straus during the Spring '10 term at University of Maryland Eastern Shore.

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Week 3 Chapter 15-1 (ACCT-311) - CLASSCONFERENCES: CONCEPTS...

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