Andrew Owns 100% of the Stock of Crow's Farm Inc

question 15

Multiple Choice

Andrew owns 100% of the stock of Crow's Farm Inc. ,an S corporation,that raises cattle and corn.The farm's annual gross receipts have never exceeded $3,000,000 and the farm is not considered a tax shelter.

• A)The farm must report its sales and cost of goods sold by the accrual method because inventories are material to the business.
• B)The income from the farm may be reported by the cash method.
• C)The income from the sales of cattle may be reported by the cash method,but the income from the sales of corn must be reported by the accrual method.
• D)The income from the sales of corn may be reported by the cash method,but the income from cattle sales must be reported by the accrual method.
• E)None of the above.

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Definitions:

Pre-Offer Strategy

A plan devised prior to making an offer, typically in negotiation or bidding contexts, to maximize successful outcomes.

Tender Offer

A public proposal made by a person or company to shareholders to buy shares of a corporation, typically at a premium over the market price.

Stock Acquisition

The purchase of enough of the voting stock of a corporation to allow the buyer to control the corporation. Also called takeover.

Merger

The combination of two or more companies into one, where one corporation is completely absorbed by another corporation.