Fact Pattern 41-4​ Diversified Corporation's Articles of Incorporation Prohibit a Sale of Its

question 49

Multiple Choice

Fact Pattern 41-4​
Diversified Corporation's articles of incorporation prohibit a sale of its assets without a vote of the board of directors. Diversified's officers sell some assets to Enterprise Company without notice to the board. The officers also fail to pay Diversified's taxes on time, and some Diversified funds are not accounted for.
-Refer to Fact Pattern 41-4. In these circumstances, the appropriate remedy is most likely​

• A) ​a sale of the rest of Diversified's assets to its directors and shareholders.
• B) ​Diversified's consolidation or merger with Enterprise.
• C) ​Diversified's dissolution.
• D) ​payment of damages to Diversified's officers.

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Definitions:

Current Assets

Resources that are anticipated to be turned into cash, disposed of, or utilized within a year or throughout the regular business cycle.

Classified Balance Sheet

A balance sheet that groups together similar assets and liabilities, using several classifications and categories, to provide useful information to the users.

Deferred Expenses

Costs that are incurred but not expensed immediately and are carried on the balance sheet as an asset until recognized.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of the business.