A Purchaser Has Agreed to Purchase All of the Shares

question 4

Multiple Choice

A purchaser has agreed to purchase all of the shares of Tee Co.,a CCPC.Tee Co.owns fifteen significant capital assets,all of which have appreciated in value.Which of the following is TRUE?

• A)The purchaser will obtain a cost base of the assets equal to their fair market values.
• B)Capital cost allowance will be based on higher asset values for the purchaser than was the case for the vendor.
• C)The sale will result in business income for the vendor.
• D)The purchaser will be responsible for the liabilities of Tee Co.

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Definitions:

Limited Partner

An investor in a partnership who does not have managerial control and whose liability for the partnership's debts is limited to the amount they invested in the business.

ULPA

Ultra-Low Penetration Air (ULPA) filters, which are more efficient than HEPA filters at trapping extremely small particles.

General Partners

Individuals in a partnership who have unlimited liability for the debts and obligations of the partnership, and who manage the operations of the business.

Limited Partners

Investors in a partnership who are not involved in day-to-day management and are only liable for the investment they have made in the business.