Mr. Jones Smith wants to buy Smithon Manufacturing because it is very profitable. Right now it has 30 shareholders but no single majority shareholder. It is a C corporation with a fiscal year-end of December 1. In order for me to buy this company, I will need to invest a lot of money in new manufacturing equipment, which means that Smithon will incur a loss for two years. I want to buy the company effective January 1. I think I should buy the company from the shareholders and convert it to an S corporation. Also, I want a fiscal year-end that is also a calendar year-end, i.e., December 31. We should consider whether I could issue shares of stock from Johnson Services which is a C corporation to the shareholders of Smithon in an exchange of shares. That way, the current Smithon owners would become new shareholders (but not owners) of Johnson Services and I would get all their shares of Smithon. If I do so, I could probably offset Smithons profits with the losses from Johnson Services. Please use your own words to answer the following questions: Merger or acquisition of Smithon by Johnson Services a.If the two companies are merged, could Smithon use Johnson Services net operating loss carryforwards? Any limitations on their use? b.Should Mr. Jones use Johnson Services stock to acquire Smithon? Why or why not? c.Would a merger or acquisition affect Mr. Jones ability to change Smithons fiscal year end to a calendar year end? Could Smithon be converted to an S corporation? d.Does the potential of significant capital investment in Smithon affect any of your answers for 2 a-c above? please utilize the following guide: 1.State the issue, 2.Explain and discuss the applicable law (IRC sections, regulations, court decision, etc.), and 3.Present your answer concisely (i.e., to the point) and in the form of a concluding paragraph that refers to specific language from the IRC sections, regulations, court decisions, and other sources (if applicable) to support the conclusion