Maurice Tutor

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About Maurice Tutor

Levels Tought:
Elementary,Middle School,High School,College,University,PHD

Expertise:
Algebra,Applied Sciences See all
Algebra,Applied Sciences,Biology,Calculus,Chemistry,Economics,English,Essay writing,Geography,Geology,Health & Medical,Physics,Science Hide all
Teaching Since: May 2017
Last Sign in: 401 Weeks Ago, 4 Days Ago
Questions Answered: 66690
Tutorials Posted: 66688

Education

  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

Experience

  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 08 Aug 2017 My Price 11.00

Stan Sewell

Stan Sewell paid $50,000 for a franchise that entitled him to market software programs in the countries o the European Union. Sewell intended to sell individual franchises for the major language groups of Western Europe - German, French, English, Spanish, and Italian. Naturally, investors considering buying a franchise from Sewell asked to see the financial statements of his business.

 

Believing the value of the franchise to be $500,000, Sewell sought to capitalize his own franchise at $500,000. The law firm of St. Charles & LaDue helped Sewell form a corporation chartered to issue 500,000 shares of common stock with par value of $1 per share. Attorneys suggested the following chain of transactions:

 

1. Sewell's cousin, Bob, borrows $500,000 from a bank and purchases the franchise from Sewell.

 

2. Sewell pays the corporation $500,000 to acquire all its stock.

 

3. The corporation buys the franchise from Cousin Bob.

 

4. Cousin Bob repays the $500,000 loan to the bank.

 

If the final analysis, Cousin Bob is debt-free and out of the picture. Sewell owns all of the corporation's stock, and the corporation owns the franchise. The corporation's balance sheet lists a franchise acquired at a cost of $500,000. This balance sheet is Sewell's most valuable marketing tool.

 

Requirements

 

1. What is unethical about this situation?

 

2. Who can be harmed? How can they be harmed? What role does accounting play?

Instructions:Your initial response should be no less than 250 words.

Answers

Maurice Tutor
(5)
Status NEW Posted 08 Aug 2017 10:08 PM My Price 11.00

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