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American College HS330 Exam - Topic 1 Question 41 Discussion

Actual exam question for American College's HS330 exam
Question #: 41
Topic #: 1
[All HS330 Questions]

Harry, Barry, and Carrie incorporated their business, HBC and received 150 shares of stock each. They entered into a cross-purchase buy-sell agreement at this time. The agreement binds their estates to sell their shares of stock to the surviving shareholders. Each shareholder also agrees to purchase one-half of the shares held by the estate of the deceased shareholder. Assume Barry dies sometime later. Which of the following statements concerning this arrangement is (are) correct?

l. When the agreement is carried out, HBC will have 300 shares of stock outstanding.

ll. Barry's estate will have additional liquidity to meet expenses and distribution equirements.

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Suggested Answer: B

by Malinda at May 03, 2022, 11:53 AM

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Leslee
4 months ago
Both statements are correct, it's a solid agreement!
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Karan
4 months ago
I thought the shares would just go to the surviving members, not the estate.
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Samuel
4 months ago
Wait, how does Barry's estate get liquidity from this?
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Malissa
4 months ago
Totally agree, that's how it works!
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Herschel
5 months ago
HBC will have 300 shares outstanding after Barry's death.
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Nieves
5 months ago
I'm a bit confused on this one. I know the basics of SaaS, but I'm not sure how to apply that knowledge to these specific products. I'll have to review my notes and try to eliminate the options that don't fit the SaaS model.
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Glennis
5 months ago
Hmm, let me think about this... I'm not totally sure, but I'm guessing the answer is Milestones and Case data. I'll have to double-check the material to be sure.
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Derick
5 months ago
The question is asking about the default behavior of hardware failover, so I'll focus on that. Option D sounds like it might be the correct answer, but I'll double-check the details.
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