(Examining the entity assumption, LO 2) Mazeppa Ltd. (Mazeppa) is a producer of electronic parts that it...
Question:
(Examining the entity assumption, LO 2) Mazeppa Ltd. (Mazeppa) is a producer of electronic parts that it sells to manufacturers of electronic equipment. Mazeppa has organized itself by setting up a number of separate corporations to operate different parts of its business. The corporate organization chart is shown below. Each box rep- resents a separate corporation and the percentage shown represents the percentage of that corporation that is owned the corporation above it in the chart. For exam- ple, Mazeppa Ltd. owns 100% of Mazeppa US Ltd. and Mazeppa Distributing Ltd. owns 60% of Mazeppa Retail Ltd. (The other 40% of Mazeppa Retail Ltd. is owned by other investors).
Required For each of the following situations, indicate which entity the party described would want information about. Explain your answer:
a. An investor purchases shares in Mazeppa Ltd. and wishes to evaluate the performance of the company.
b. A bank is evaluating a loan application from Mazeppa US Ltd. The loan will not be guaranteed by any other entity.
c. The 40% shareholders in Mazeppa Retail Ltd. wish to evaluate their investment in that company.
d. The Canada Customs and Revenue Agency is assessing the tax return filed by Mazeppa Distributing Ltd.
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