In Order to Obtain Limited Liability,Tom and Doris Formed an LLC

question 33

Essay

In order to obtain limited liability,Tom and Doris formed an LLC to operate their catering business.They sometimes deposit the proceeds from catering jobs into their personal checking accounts,and if they need to pay personal bills and are short of funds,they use the business account.If creditors of the business cannot get payment for their invoices,is there anything a court can do to help the creditors?

Recognize the importance of classifying costs accurately within the relevant range for effective CVP analysis.

Understand different analytical tools and methods for cost behavior analysis and their application in business decisions.

Understand the presentation and reporting of current and non-current assets on the balance sheet.

Recognize and calculate adjustments to asset valuations and understand their financial implications.

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Definitions:

Typical Level

The standard or average condition, degree, or amount for something, usually established over time through observation or measurement.

Residual Dividend Policy

A strategy where dividends are paid out of the remaining net income after meeting the company's investment needs.

Target Capital Structure

Target capital structure is the mix of debt, preferred stock, and common equity that a company aims to maintain to finance its operations and fund its growth.

Net Income

The final amount a company earns, post all deductions for expenses and taxes from its overall revenue.