Question
Identify the proper classification for the following transactions: A-A Reorganization B- B Reorganization C- C Reorganization F- Forward Triangular Merger R- Reverse Triangular Merger T-
Identify the proper classification for the following transactions:
A-A Reorganization
B- B Reorganization
C- C Reorganization
F- Forward Triangular Merger
R- Reverse Triangular Merger
T- Taxable Acquisition
Alpha Corp is a widget manufacturing corporation that has only one class of stock and each share counts for one vote. It has 2000 shares outstanding worth $2,000,000. Alpha Corps only asset is inventory worth $1,000,000 and $1,000,000 of cash.
Beta Corp is also a widget corporation that has only one class of stock and each share counts for one vote. It has 1000 shares outstanding worth $1,000,000. Beta Corps only asset is inventory worth $1,000,000.
Situation 1: Alpha Corp shareholders transfer 900 shares of Alpha Corp stock in exchange for 900 shares of Beta Corp. After the transaction, Beta Corp continues as a subsidiary of Alpha Corp.
Situation 2: Alpha Corp shareholders transfer 900 shares of Alpha Corp stock in exchange for 900 shares of Beta Corp. After the transaction, Beta Corp distributes all its inventory to Alpha Corp in a complete liquidation.
Situation 3: Alpha Corp shareholders transfer 700 shares of Alpha Corp stock in exchange for 700 shares of Beta Corp. After the transaction, Beta Corp continues as a subsidiary of Alpha Corp.
Situation 4: Alpha Corp shareholders transfer 750 shares of Alpha Corp stock and $150,000 in exchange for $900,000 worth of Beta Corps inventory. After the transaction Beta Corp distributes the $100,000 remaining inventory to its shareholders in a complete liquidation.
Situation 5: Alpha Corp shareholders transfer 750 shares of Alpha Corp stock and $150,000 in exchange for $900,000 worth of Beta Corps inventory. After the transaction Beta Corp continues to operate a smaller business with the remaining $100,000 of inventory.
Situation 6: Beta Corp merges into Alpha Corp under state law. Beta shareholders receive $800,000 in cash and $200,000 in notes. Beta Corp transfers all its inventory to Alpha Corp and Beta Corp liquidates completely.
Situation 7: Beta Corp merges into Alpha Corp under state law. Beta shareholders receive 500 Alpha shares and $500,000 cash. Beta Corp transfers all its inventory to Alpha Corp and Beta Corp liquidates completely.
Situation 8: Alpha Corp forms a newly formed corporation, Charlie Corp. Charlie Corp merges into Beta Corp under state law. Beta Corp shareholders receive 700 Alpha shares and $300,000 cash. After the merger, Beta Corp continues as a subsidiary of Alpha Corp.
Situation 9: Alpha Corp forms a newly formed corporation, Charlie Corp. Beta Corp merges into Alpha Corp under state law. Beta Corp shareholders receive 700 Charlie shares and $300,000 cash. After the merger, Charlie Corp continues as a subsidiary of Alpha Corp and holds all of Beta Corps inventory.
Situation 10: Alpha Corp forms a newly formed corporation, Charlie Corp. Beta Corp merges into Alpha Corp under state law. Beta Corp shareholders receive 700 Alpha shares and $300,000 cash. After the merger, Charlie Corp continues as a subsidiary of Alpha Corp and holds all of Beta Corps inventory
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