Advise as to the liability of all the parties
Course:- Cost Accounting
Reference No.:- EM13391

Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Cost Accounting

Andrew, Brian, Colin, Diana and Elizabeth were the directors of Gemsales Pty Ltd, a company engaged in the business of importing and supplying jewellery as wholesalers to the local market.

The company decided that as the market was becoming more competitive it needed to expand its business as it felt with increased volumes of sales it would be able to lower its prices and be more competitive. In order to do so it obtained a $4 million dollar loan from the Friendly Bank Ltd. $3 million was used to buy more stock and $1 million was used to buy a large new warehouse and showrooms from Traders Pty Ltd.Six months later, Brian resigned as a director. At the same time it was clear the company had over-extended itself and was insolvent and could not pay the interest on its loans.

It also became clear that Brian was a major shareholder in Traders Pty Ltd and the other directors were unaware of this at the time of the purchase of the warehouse and showrooms. Furthermore, Brian had been approaching other established customers of Gemsales Pty Ltd and had secured orders for his own business.

Write a report on given case study and Advise as to the liability of ALL the parties both under common law and the Corporations Law.

  • Problem Identification
  • Discussion and Analysis
  • Breaching of Duties
  • Solution
  • Conclusion
  • Peferences

Word count: 2000

Reference style : Harvard referencing style

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Cost Accounting) Materials
Prepare a table like Exhibit 7.14. Find the costs of ordering and carrying inventory for each of the following number of orders per year: 40 orders, 50 orders, 60 orders.
COAC216 Cost Accounting Assessment - Group Report. Analyse the process of Controlling in the manufacturing company for two issues: How can it monitor its manufacturing &/or se
If Federated uses the step method of allocating service department costs beginning with Department S1, what is the total amount of cost that will be allocated from S2 to Dep
Heather and Nikolay Laubert are married and file a joint income tax return. Their address is 3847 Jackdaw Path, Madison, WI 58493-Compute Heather and Nikolay's 1040, Schedule
Compute the direct cost of compensating Gaines for her services on the flight from San Diego to Sacramento. Compute the cost of Gaines's services that is an indirect cost
Compute the breakeven point in units, assuming that the planned revenue mix is maintained and compute the breakeven point in units if Only standard carriers are sold
Prepare a variable costing income statement - Prepare an absorption costing income statement and calculate price variances for material and labor and denote whether they are f
Determine the partial account balances.  Why should the Overhead account's underapplied or overapplied overhead be transferred to the Cost of Goods Sold account?