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

Question - the following information is available for the

Question - The following information is available for the 21,000 units of X Company's one product sold in 2017: Selling price $46.00 Variable costs per unit $30.00 Total fixed costs $756,000 In 2018, X Company expects sa ...

Question - as a senior accountant you had just prepared and

Question - As a senior Accountant you had just prepared and posted the journal entry that closed the revenue accounts to the income summary Account. You then noticed that your bookkeeper made a tragic error in recording ...

Question 1 jazeera publishing house produces consumer

Question: 1. Jazeera Publishing House produces consumer magazines. The house and home division which sells home improvement and home decorating magazines, has seen a 20% reduction in operating income over the past nine m ...

Question - dollars for dozers entity dde has a bulldozer it

Question - Dollars for Dozers Entity (DDE) has a bulldozer it acquired 3 years ago. DDE has decided to sell the dozer in its principle market located in Tennessee. DDE has decided that the dozer needs to recondition its ...

Question - on january 1 2017 lance co issued five-year

Question - On January 1, 2017 Lance Co. issued five-year bonds with a face value of $840,000 and a stated interest rate of 8% payable semiannually on July 1 and January 1. The bonds were sold to yield 10%. Present value ...

Question - on january 1 josh loaned his son seth 100000

Question - On January 1, Josh loaned his son Seth $100,000, interest-free. Seth uses the money to invest in corporate bonds paying 8% annual interest. Assume that the applicable federal rate of interest is 5%. You may al ...

Questions -1 discuss the importance of accurate product

Questions - 1. Discuss the importance of accurate product costing. In your discussion you should highlight the problems associated with using traditional costing system which Beztec has been using. 2. Calculate the cost ...

Question - a company has 19 units in inventory at the

Question - A company has 19 units in inventory at the beginning of May and paid $55 for each unit. On May 2, the company buys 24 more units and pays $57 for each unit. On May 5, the company sells 30 units for $84 each. I ...

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 faith essay instructionsyou will write an 800-word

Question: Faith Essay Instructions You will write an 800-word essay in current APA format that focuses on how biblical concepts are related to the fields of accounting and finance. The essay must incorporate a thoughtful ...

  • 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