Ask Question, Ask an Expert

+1-415-315-9853

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

Ginos restaurant is a popular restaurant in boston

Gino's Restaurant is a popular restaurant in Boston, Massachusetts. The owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an activity-based cos ...

Reflectionbulldescribe and explain what you believe are the

Reflection • Describe and explain what you believe are the top three most important corporate taxation concepts you learned in this course. (Some of the topics, Enacting New Taxes, Calculating Tax Cost, Cash Method Versu ...

Intercompany debt both long term and short term arises

Intercompany debt, both long term and short term, arises frequently. In some cases, intercorporate borrowings may arise because one affiliate can borrow at a cheaper rate than others, and lending to other affiliates may ...

Accountingcase to assess assurance of learning goal ethical

Accounting Case to assess Assurance of Learning Goal (Ethical Perspectives) Michael Greer is the Marketing Vice President for Atlantic Lubricants headquartered in Boston with extensive operations in New York City that se ...

Assignmentto write discussion post min 350 words for each

Assignment To write discussion post. Min 350 words for each task. Do not use any direct quotes and/or cut and pasted information (i.e. your discussion is to be 100% your thoughts, ideals and insights). A minimum 350 word ...

Problem 3-2 lo 2 simple equity method adjustments

Problem 3-2 (LO 2) Simple equity method adjustments, consolidated worksheet. On January 1, 2015, Paro Company purchases 80% of the common stock of Solar Company for $320,000. Solar has common stock, other paid-in capital ...

- discuss the pros and cons of leasing vs purchasing a

- Discuss the pros and cons of leasing vs purchasing a fleet of business vehicles for a client's business, (assume the loan rate on purchasing the vehicles is 6% and the implicit interest rate in the lease is also 6%). - ...

Careers in accountingaccounting is the study of how

Careers in Accounting Accounting is the study of how businesses track their income and assets over time. Accountants engage in a wide variety of activities in addition to preparing financial statements and recording busi ...

Accounting assignmentthis project requires you to select a

Accounting Assignment This project requires you to select a business and analyze part of its accounting information system. You will focus on a selected business process, develop conclusions from your observations, and a ...

Presentation 2- separate presentations but use same

Presentation (2- Separate Presentations but use same Publicly Traded Company) ** Please use references as needed ** Create a 10- to 12-slide presentation. Choose a publicly traded company. Using the most recent SEC 10-k ...

  • 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

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen