Question

In: Accounting

As of January 1, 2019, the stock of Pace Corp. was owned as follows:                          Ellis     

As of January 1, 2019, the stock of Pace Corp. was owned as follows:

                         Ellis                                                     10 Shares

                        Vivacious (Ellis's spouse)                   30 Shares

                        Frank (Ellis' father)                             40 Shares

                        Herb (Frank’s brother)                       20 Shares

On December 31, 2019, Pace Corp. paid Vivacious $150,000 and she surrendered ten (10) shares of stock.

Immediately prior to the December 31 transaction, Vivacious’ total ownership interest in Pace Corp was equal to _____ percent, consisting of ___ shares owned directly and ___ shares owned indirectly.

Solutions

Expert Solution

Ans.=

In case of shares of a company, a person may hold such shares directly, or indirectly through a legal entity or a natural person(in which case, the person becomes the beneficial owner of the shares).

Hence, a person beneficially owns securities owned by his/her child, spouse, parent, grandparent, father in law, brother in law, son in law and daughter in Law.

Therefore,

In the above case, Vivacious will become the indirect shareholder or beneficial owner of the shares held by his spouse(Ellis) and father in law(Frank) which is equal to =

Shares of Ellis = 10 shares

Shares of Frank = 40 shares

=> Total Indirect holding = 50 shares

Also,

Total shares held directly by Vivacious = 30 shares

Hence,

Total Shares held by Vivacious = Direct + Indirect = 30 + 50 = 80 shares

Total shares of the company = 100 shares

So,

Percentage ownership of shares = 80 shares / 100 shares = 80%

Conclusion =

Immediately prior to the December 31 transaction, Vivacious’ total ownership interest in Pace Corp was equal to 80 percent, consisting of 30 shares owned directly and 50 shares owned indirectly.

=> I would be glad to receive a feedback or suggestion to the question answered above.

Stay Home, Stay Safe

Thank You.

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Permabilt Corp. was incorporated on January 1, 2019, and issued the following stock for cash: 2,000,000...
Permabilt Corp. was incorporated on January 1, 2019, and issued the following stock for cash: 2,000,000 shares of no-par common stock were authorized; 750,000 shares were issued on January 1, 2019, at $35 per share. 800,000 shares of $100 par value, 7.5% cumulative, preferred stock were authorized; 540,000 shares were issued on January 1, 2019, at $105 per share. No dividends were declared or paid during 2019 or 2020. However, on December 22, 2021, the board of directors of Permabilt...
Homestead Oil Corp. was incorporated on January 1, 2019, and issued the following stock for cash:...
Homestead Oil Corp. was incorporated on January 1, 2019, and issued the following stock for cash: 850,000 shares of no-par common stock were authorized; 140,000 shares were issued on January 1, 2019, at $18.00 per share. 250,000 shares of $110 par value, 7.50% cumulative, preferred stock were authorized; 61,000 shares were issued on January 1, 2019, at $150 per share. Net income for the years ended December 31, 2019 and 2020 was $1,400,000 and $2,500,000, respectively. No dividends were declared...
The stockholders’ equity accounts of Bramble Corp. on January 1, 2022, were as follows. Preferred Stock...
The stockholders’ equity accounts of Bramble Corp. on January 1, 2022, were as follows. Preferred Stock (7%, $100 par noncumulative, 4,500 shares authorized) $270,000 Common Stock ($4 stated value, 270,000 shares authorized) 900,000 Paid-in Capital in Excess of Par Value—Preferred Stock 13,500 Paid-in Capital in Excess of Stated Value—Common Stock 432,000 Retained Earnings 619,200 Treasury Stock (4,500 common shares) 36,000 During 2022, the corporation had the following transactions and events pertaining to its stockholders’ equity. Feb. 1 Issued 4,500 shares...
The stockholders’ equity accounts of Ayayai Corp. on January 1, 2017, were as follows. Preferred Stock...
The stockholders’ equity accounts of Ayayai Corp. on January 1, 2017, were as follows. Preferred Stock ( 7%, $ 100 par noncumulative,  4,200 shares authorized) $ 252,000 Common Stock ($ 3 stated value,  336,000 shares authorized) 840,000 Paid-in Capital in Excess of Par Value—Preferred Stock 12,600 Paid-in Capital in Excess of Stated Value—Common Stock 537,600 Retained Earnings 691,500 Treasury Stock ( 4,200 common shares) 33,600 During 2017, the corporation had the following transactions and events pertaining to its stockholders’ equity. Feb. 1...
The stockholders’ equity accounts of Sheffield Corp. on January 1, 2022, were as follows. Preferred Stock...
The stockholders’ equity accounts of Sheffield Corp. on January 1, 2022, were as follows. Preferred Stock (8%, $100 par noncumulative, 5,000 shares authorized) $450,000 Common Stock ($10 stated value, 800,000 shares authorized) 1,550,000 Paid-in Capital in Excess of Par Value—Preferred Stock 67,000 Paid-in Capital in Excess of Stated Value —Common Stock 800,000 Retained Earnings 810,000 Treasury Stock (8,400 common shares) 67,200 During 2022, the corporation had the following transactions and events pertaining to its stockholders’ equity. Mar 1 Issued 6,000...
The stockholders’ equity accounts of Riverbed Corp on January 1, 2022, were as follows. Preferred Stock...
The stockholders’ equity accounts of Riverbed Corp on January 1, 2022, were as follows. Preferred Stock (7%, $100 par noncumulative, 15,000 shares authorized) $900,000 Common Stock ($4 stated value, 900,000 shares authorized) 3,000,000 Paid-in Capital in Excess of Par Value—Preferred Stock 45,000 Paid-in Capital in Excess of Stated Value—Common Stock 1,440,000 Retained Earnings 2,064,000 Treasury Stock (15,000 common shares) 120,000 During 2022, the corporation had the following transactions and events pertaining to its stockholders’ equity. Feb. 1 Issued 15,000 shares...
The stockholders’ equity accounts of Flounder Corp. on January 1, 2022, were as follows. Preferred Stock...
The stockholders’ equity accounts of Flounder Corp. on January 1, 2022, were as follows. Preferred Stock (7%, $100 par noncumulative, 7,500 shares authorized) $450,000 Common Stock ($4 stated value, 450,000 shares authorized) 1,500,000 Paid-in Capital in Excess of Par Value—Preferred Stock 22,500 Paid-in Capital in Excess of Stated Value—Common Stock 720,000 Retained Earnings 1,032,000 Treasury Stock (7,500 common shares) 60,000 During 2022, the corporation had the following transactions and events pertaining to its stockholders’ equity. Feb. 1 Issued 7,500 shares...
The stockholders’ equity accounts of Riverbed Corp on January 1, 2022, were as follows. Preferred Stock...
The stockholders’ equity accounts of Riverbed Corp on January 1, 2022, were as follows. Preferred Stock (7%, $100 par noncumulative, 15,000 shares authorized) $900,000 Common Stock ($4 stated value, 900,000 shares authorized) 3,000,000 Paid-in Capital in Excess of Par Value—Preferred Stock 45,000 Paid-in Capital in Excess of Stated Value—Common Stock 1,440,000 Retained Earnings 2,064,000 Treasury Stock (15,000 common shares) 120,000 During 2022, the corporation had the following transactions and events pertaining to its stockholders’ equity. Feb. 1 Issued 15,000 shares...
The stockholders’ equity accounts of Bramble Corp. on January 1, 2017, were as follows. Preferred Stock...
The stockholders’ equity accounts of Bramble Corp. on January 1, 2017, were as follows. Preferred Stock (7%, $100 par noncumulative, 5,000 shares authorized) $300,000 Common Stock ($4 stated value, 300,000 shares authorized) 1,000,000 Paid-in Capital in Excess of Par Value—Preferred Stock 15,000 Paid-in Capital in Excess of Stated Value—Common Stock 480,000 Retained Earnings 688,500 Treasury Stock (5,000 common shares) 40,000 During 2017, the corporation had the following transactions and events pertaining to its stockholders’ equity. Feb. 1 Issued 5,000 shares...
The stockholders’ equity accounts of Martinez Corp. on January 1, 2022, were as follows. Preferred Stock...
The stockholders’ equity accounts of Martinez Corp. on January 1, 2022, were as follows. Preferred Stock (7%, $100 par noncumulative, 10,500 shares authorized) $630,000 Common Stock ($4 stated value, 630,000 shares authorized) 2,100,000 Paid-in Capital in Excess of Par Value—Preferred Stock 31,500 Paid-in Capital in Excess of Stated Value—Common Stock 1,008,000 Retained Earnings 1,444,800 Treasury Stock (10,500 common shares) 84,000 During 2022, the corporation had the following transactions and events pertaining to its stockholders’ equity. Feb. 1 Issued 10,500 shares...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT