Comparative Analysis — BTN D-2
1. Apple was organized/founded in 1976, and Google was
2. Apple’s initial public offering occurred in 1980. Google’s initial public
3. Apple and Google stock are both listed on the NASDAQ Exchange.
4. Apple’s total equity (book value) is $123,549 million at September 28,
Ethics Challenge — BTN D-3
1. Income allocation per original agreement
Mobey Oak Chesterfield Total
Salary allowance…........... $ 3,000 $ 3,000 $ 3,000 $ 9,000
Per patient charges………. 4,100 * 12,300** 24,600*** 41,000
2. Income allocation per Chesterfield’s proposal
Mobey Oak Chesterfield Total
(.10 x 50,000)
(.30 x 50,000)
(.60 x 50,000)
3. The ethical concern here is that Chesterfield has proposed a change to
the partnership agreement that appears to be only self-serving. It is true
that Chesterfield is the group’s largest producer and, therefore, is
A potentially fair compromise would be to study the referral patterns of
Mobey and Oak. Through analysis, a dollar value can be assigned to the
average amount of production generated monthly for Chesterfield
Communicating in Practice — BTN D-4
— STUDY NOTES —
ORGANIZATIONS WITH PARTNERSHIP CHARACTERISTICS
I. Limited Partnerships
II. Limited Liability Partnerships
III. S Corporations
IV. Limited Liability Companies
I. Limited Partnerships
These organizations are identified in its name with the words “Limited
Partnership,” or “Ltd.,” or “L.P.”
agreement.
A limited partnership agreement often specifies unique procedures for
allocating incomes and losses between general and limited partners.
The same basic accounting procedures are used for both limited and
general partnerships.
II. Limited Liability Partnerships
This is identified in its name with the words “Limited Liability
Partnership” or by “LLP.”
Most states hold all partners personally liable for other
partnership debts.
Accounting for a limited liability partnership is the same as for a
general partnership.
Communicating in Practice (Concluded)
Continued
III. S Corporations
Certain corporations with 100 or fewer stockholders can elect to be
treated like a partnership for income tax purposes. These corporations are
called Sub-Chapter S or simply “S” corporations. This distinguishes them
from other corporations, called Sub-Chapter C or simply “C” corporations.
IV. Limited Liability Companies
A new form of business organization is the limited liability company. The
names of these businesses usually include the words “Limited Liability
Company” or an abbreviation such as “LLC” or “LC.”
This form of business has certain features like a corporation and others
like a limited partnership. The owners, who are called members, are
A limited liability company usually has a limited life.
For income tax purposes, the IRS usually classifies a limited liability
company as a partnership.
Taking It to the Net — BTN D-5
1. The account titles given in the equity section of Advanced BioEnergy,
LLC are:
2. There are 25,410,852 units and 24,714,180 units issued and outstanding
at September 30, 2013 and 2012, respectively.
Teamwork in Action — BTN D-6
1.
Income (Loss)
Sharing Plan Calculations Baker Warner Rice Total
(a) $450,000/3………..………………………………………..$150,000 $150,000 $150,000 $ 450 ,000
(b) $450,000 x ($200,000/$1,000,000)………..…..........
$ 90,000
$450,000 x ($300,000/$1,000,000)………..…..........$135,000
(c) Net income……………….………………….……………. $ 450,000
Salary allowances…….……………………….…..…..$ 50,000 $ 60,000 $ 70,000 (180 ,000 )
Balance of income……………………………. 270,000
(d) Net Income………………………………..….…. $ 450,000
Interest allowances:
10% x $200,000………..……...…………….$ 20,000
10% x $300,000………..……...……………. $ 30,000
10% x $500,000………..……...……………. $ 50,000
Balance of income……………………………._______ _______ _______ $ 0
Shares of partners…………..………………..$136,666 $146,667 $166,667
2. Team members share solutions.
3. Answers will vary by team. One additional income sharing basis would
Entrepreneurial Decision — BTN D-7
1. Daniel, Craig, and their future partners would be wise to construct an
agreement that includes the following:
a) names (reputations) and contributions
b) rights and duties
2. The partnership form of business organization will have several
advantages for Daniel, Craig, and their partners. Three of these
3. Several disadvantages exist with the partnership form of organization.
Three of these include: (a) The greatest disadvantage is that each
Global Decision — BTN D-8
1. Byung-Chull Lee (also referred to as Lee Byung-Chull)
organized/started the company in 1938 in Taegu, Korea.
2. In the beginning, the company focused primarily on trade export,
selling dried Korean fish, vegetables, and fruit to Manchuria and
3. Samsung groups its affiliated companies into five areas:
Electronics
Machinery & Heavy Industries