Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Accounting Basics Expert

Assignment Topic:

Andrew, Brian, Colin, Diana and Elizabeth were the directors of the Gemsales Pty Ltd, a company engaged in the business of importing and supplying jewellery as wholesalers to local market.

The company decided that as the market was becoming more competitive it required expanding its business as it felt with raised volumes of sales it would be capable to lower its prices and be more competitive. In order to do so it received a $4 million dollar loan from the Friendly Bank Ltd. $3 million was employed to buy more stock and $1 million was employed to buy a large new warehouse and showrooms from Traders Pty Ltd.

Colin was not at the meeting that had made such decisions as he was in hospital recovering from a serious accident. Elizabeth, as was her usual custom, had not attended the meeting however signed the necessary documentation agreeing to the expansion of the business and the getting of the loan. Diana, who attended, said she did not know if she agreed and refrained from voting. Andrew and Brian both voted to go further on with the expansion and getting of the loan.

At about this time Brian has established contact with Victor, who was setting up a new business as a retailer of jewellery. Victor was looking for consistent suppliers, however said he would not deal with Gemsales Pty Ltd as he did not like Andrew, the Managing Director. Not wishing to miss out on such a lucrative business opportunity, Brian arranged to set-up his own business as a jewellery wholesaler and a contract was entered into between Victor and Brian for the supply of jewellery.

After six months, Brian resigned as a director. At the same time it was obvious the company had over-extended itself and was insolvent and could not pay the interest on its loans.

This as well became clear that Brian was a main shareholder in Traders Pty Ltd and the other directors were oblivious of this at the time of the purchase of the warehouse and showrooms. Moreover, Brian had been approaching other established customers of Gemsales Pty Ltd and had secured orders for his own business.

Advise as to the liability of ALL parties both beneath common law and the Corporations Law. In your answer you must address all the issues associating to each of the directors and their responsibilities to the corporation.

PLEASE NOTE THE FOLLOWING INSTRUCTIONS:

References should be cited in Harvard referencing style (ex: Smith 1992). The assignment should comprise a bibliography (list of references employed in the assignment). The Internet might be used for authoritative reference material provided the source, author, date of access, and site address is obviously shown in footnote format.

Additionally to sources from the Internet, at least three hard-copy sources should as well be used. Such can be either books or articles or both.  Materials from any common law jurisdiction might be employed.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M9139

Have any Question? 


Related Questions in Accounting Basics

Assignment 1 personal assessment of strengthsto prepare for

Assignment 1: Personal Assessment of Strengths To prepare for this assignment, make sure to complete the Strengths Finder quiz located in the back of your book. This will take approximately 30 to 45 minutes. Click here f ...

Question - accounting ninja incorporateds income statement

Question - Accounting Ninja Incorporated's Income Statement showed the following relvant data for thwe year ended December 31, 2017: Sales revenue - $207037 CPGS - $121277 Income from continuing operations - $253838 Loss ...

Question - a married couple received 7200 of social

Question - A married couple received $7,200 of social security benefits. a - Calculate the taxable amount of those benefits if the couple's provisional income is $33,000. b - Calculate the taxable amount of those benefit ...

Question - the ap clerk of a company writes the checks for

Question - The A/P clerk of a company writes the checks for vendors, and the controller signs the checks. The A/P clerk has devised a plan to give herself a raise. She creates a new vendor for her friend's business and c ...

Question - given1 purchased land for 12500 cash2 acquired

Question - Given 1. Purchased land for $12,500 cash. 2. Acquired $40,000 cash from the issue of common stock. 3. Received $79,000 cash for providing services to customers. 4. Paid cash operating expenses of $40,500. 5. B ...

Question - cullumber company purchased machinery for 176400

Question - Cullumber Company purchased machinery for $176,400 on January 1, 2017. It is estimated that the machinery will have a useful life of 20 years, salvage value of $14,700, production of 88,600 units, and working ...

Question - during 2018 beltram inc had sales of 35633

Question - During 2018, Beltram, Inc. had Sales of $3,563.3 million, Gross profit of $1,634.6 million and Selling, general, and administrative expenses of $1,278.0 million. What was Beltram's Cost of sales for 2018? $ 88 ...

Question - henry company physical inventory on december 31

Question - Henry Company, physical inventory on December 31, 2017, merchandise with a cost of $439,670 was on hand at that date. Following items were all excluded from the $439,670. 1. Merchandise of $65,330 which is hel ...

Question - a building classified as part of ppe is

Question - A building classified as part of PPE is accounted for differently from a building classified as Investment Property. The cost and fair value models are available for both, but whereas PPE is depreciated under ...

Questions answer the following questions all the questions

Questions: Answer the following questions. All the questions below are based on it. You are NOT allowed to cite information from other sources!!! It is based on Australian accounting system so do not rely too much on you ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As