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747
Problem 12-6B (75 minutes)
Note: All entries in this problem are dated Jan. 18.
1.
(a)
Cash ..........................................................................
650,000
Equipment ...........................................................
617,200
2.
(a)
Cash ..........................................................................
530,000
Loss on Sale of Equipment ................................
87,200
748
Problem 12-6B (Concluded)
3.
(a)
Cash ..........................................................................
200,000
Loss on Sale of Equipment ................................
417,200
4.
(a)
Cash ..........................................................................
150,000
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 12
749
Serial Problem — SP 12
1. The owner should consider several factors:
a. If the company continues to earn profits, at a 1:1 ownership, she will
have to share profits equally with her new partner. On the other hand,
2a.
3.
Jan. 1
Cash ..........................................................................
20,090
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 12
Reporting in Action — BTN 12-1
1. The founders of Apple are Steve Wozniak, Steve Jobs and Ron Wayne.
2. At least two differences would be immediately apparent between
Apple’s corporate income statement and a partnership income
statement.
3. Specifically, the balance sheet for a partnership would not have the
following accounts as reported in the Apple balance sheet reproduced
in Appendix A:
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 12
751
Comparative Analysis — BTN 12-2
1. Apple was organized/founded in 1976, and Google was
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 12
752
Ethics Challenge — BTN 12-3
1. Income allocation per original agreement
Mobey
Oak
Chesterfield
Total
Salary allowance ..............
$ 3,000
$ 3,000
$ 3,000
$ 9,000
2. Income allocation per Chesterfield’s proposal
Mobey
Oak
Chesterfield
Total
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
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 12
753
Communicating in Practice — BTN 12-4
--- 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."
• A limited partnership has two classes of partners, general and limited. At
least one partner must be a general partner who assumes management
duties and unlimited liability for the debts of the partnership. The limited
partners have no personal liability beyond the amounts they invest in the
partnership.
II. Limited Liability Partnerships
• This is identified in its name with the words "Limited Liability Partnership"
or by "LLP."
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 12
754
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."
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 12
755
Taking It to the Net — BTN 12-5
1. The account titles given in the equity section of Advanced BioEnergy,
LLC are:
• Members’ capital, no par value
2. There are 25,410,851 units issued and outstanding at September 30,
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 12
756
Teamwork in Action — BTN 12-6
1.
Income (Loss)
Sharing Plan
Calculations
Baker
Warner
Rice
Total
(c)
Net income .......................................................
$ 450,000
(d)
Net Income .............................................
$ 450,000
2. Team members share solutions.
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 12
Entrepreneurial Decision — BTN 12-7
1. Chris, Bryson, Nick, and their future partners would be wise to
construct an agreement that includes the following:
a) names (reputations) and contributions
2. The partnership form of business organization will have several
advantages for Chris, Bryson, Nick, 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
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 12
Global Decision — BTN 12-8
1. Byung-Chull Lee (also referred to as Lee Byung-Chull)
2. In the beginning, the company focused primarily on trade export,
3. Samsung groups its affiliated companies into four areas:
• Electronics
