Determine transactions qualifying as type c reorganizations


Problem 1: Determine whether the following transactions qualify as Type C reorganizations:

A. The acquisition of all assets and liabilities of Bark Inc. by Ark Inc. for 20 percent of Ark's voting preferred stock.

B. Same as (a), but Ark sells 30 percent of Bark's assets within a week because they are not needed.

C. The acquisition of all assets of Bark Inc. for $10 million of voting common stock, plus the assumption by Ark Inc. of $15 million of Bark's liabilities.

D. The acquisition of Bark's assets for $8 million of Ark's voting common, the assumption of $2 million of liabilities, and the payment by Ark of $100,000 cash.

E. The acquisition of Bark's assets for $50 million of voting, cumulative convertible preferred stock.

F. Same as (e), except that the consideration consists of bonds convertible at any time into voting common stock.

Problem 2: Label the following transactions:

A. A Nevada corporation formed a corporation in Florida and transferred all assets to it for 100 percent of its stock. It then distributed the stock to its shareholders in cancellation of their Nevada corporation stock and was dissolved.

B. ABC Corp. acquired all the stock of MNO Corp. for its convertible bonds. All MNO assets were transferred to ABC, whereupon MNO was dissolved.

C. A corporation issues $30,000 worth of its own voting stock to retire some of its outstanding bonds with a principal amount of $40,000.

D. Convertible preferred stock is converted into common stock of the issuing corporation.

E. A corporation incorporates a division and distributes the shares received pro rata to its shareholders.

F. A corporation distributes preferred stock to common shareholders for each 10 shares of common stock outstanding.

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Accounting Basics: Determine transactions qualifying as type c reorganizations
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