Problem D-5B (Concluded)
3.
(a)
Cash ………………………………………………………………..
200,000
417,200
617,200
166,880
166,880
417,200
Cash ………………………………………………………………..
(c)
342,600
342,600
133,520
112,360
245,880
4.
(a)
Cash ………………………………………………………………..
150,000
467,200
617,200
186,880
186,880
467,200
(c)
342,600
342,600
156,000
Serial Problem — SP D
1. The owner should consider several factors:
a. If the company continues to earn profits, at a 1:1 ownership, she will
2a.
Jan. 1
Cash ………………………………………………………………..
80,360
Jan. 1
Cash ………………………………………………………………..
20,090
Jan. 1
Cash ………………………………………………………………..
20,090
Reporting in Action — BTN D-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:
• Deferred tax assets
Comparative Analysis — BTN D-2
1. Apple was organized/founded in 1976, and Google was
Ethics Challenge — BTN D-3
1. Income allocation per original agreement
Mobey
Oak
Chesterfield
Total
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
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
II. Limited Liability Partnerships
Communicating in Practice (Concluded)
Continued
III. S Corporations
• Certain corporations with 100 or fewer stockholders can elect to be
IV. Limited Liability Companies
• A new form of business organization is the limited liability company. The
Taking It to the Net — BTN D-5
1. The account titles given in the equity section of Advanced BioEnergy,
LLC & Subsidiaries are:
3. The largest asset held by Advanced BioEnergy, LLC & Subsidiaries is ($
Teamwork in Action — BTN D-6
1.
Income (Loss)
Sharing Plan
Calculations
Baker
Warner
Rice
Total
$450,000/3 ………………………………………………..
(b)
Total allocated …………………………..
$ 450,000
(c)
Net income ……………………………………………….
$ 450,000
Salary allowances …………………………..
Balance of income …………………………..
Equally($270,000/3) …………………………
Balance of Income …………………………..
Total Allocated …………………………..
(d)
Net Income ………………………………………
$ 450,000
Interest allowances:
Total interest ……………………………………
Balance of income …………………………..
Balance allocated equally …………………
Entrepreneurial Decision — BTN D-7
1. Daniel, Craig, and their future partners would be wise to construct an
agreement that includes the following:
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.
Global Decision — BTN D-8
1. Byung-Chull Lee (also referred to as Lee Byung-Chull)
The original name was Samsung Sanghoe, which was a small trading
company operating in groceries, noodles, flour, and dried fish.
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