When the Sale of a Business Involves the Sale of Assets

question 1

Multiple Choice

When the sale of a business involves the sale of assets rather than the sale of shares, which of the following is false?

• A)The corporation will continue to exist following the sale of the assets.
• B)If the proper conditions are met, the vendor may be able to use the capital gain exemption on the sale of the shares.
• C)The vendor may be left with assets that might be difficult to sell.
• D)The sale of the assets may result in capital gains and business income for the corporation.

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Definitions:

Marginal Subcontracting Cost

The additional cost incurred for subcontracting one more unit of production or service.

Layoff Cost

refers to the expenses associated with terminating employees, including severance payments, benefits continuation, and administrative costs.

Hiring And Training Cost

The cumulative expenses related to recruiting new employees and providing them with necessary training to perform their job duties effectively.

Labor Hours

Labor hours refer to the total number of hours worked by employees or workers within a specific timeframe, often used to measure productivity or calculate labor costs.