partnerships 1 – www.savvyessaywriters.net
partnerships 1 – www.savvyessaywriters.net
You will complete a report covering Section I and Section II of the final project. In the report you will discuss the key issues of partnership, such as formation, splitting profits/losses, dissolution, and a cash distribution schedules. You will also discuss the issue of bankruptcy, both voluntary and forced, as well as liquidation.
Specifically, the following critical elements must be addressed:
Section I. Partnership: The company is considering forming a partnership and wants to be sure it understands the key issues regarding partnership formation, income distribution, and liquidation.
A. Explain the process and methods used to account for partnership formation. How do these methods impact the firm’s balance sheet?
B. Illustrate how the company could split profits and losses.
C. Describe what happens if the partnership doesn’t do well and the company has to dissolve it, or one of the partners becomes insolvent.
D. Illustrate the dissolution process by creating a hypothetical cash distribution schedule. Ensure all information is entered accurately.
Section II. Corporation: The company is also considering structuring its business as a corporation but is aware that there are a lot of complex issues to consider when accounting for an incorporated entity. The company is concerned about the following key areas:
A. Differentiate between various forms of bankruptcy and restructuring that the firm should understand.
1. Summarize the key points of interest if the firm fell on hard times and had to file voluntary bankruptcy. What ethical implications should be considered when debating whether or not to file bankruptcy?
2. Identify the key areas of concern if the firm fell on hard times and their creditors forced them into bankruptcy. What defenses are
available in this situation?
3. Illustrate hypothetical calculations that would be done to help creditors understand how much money they might receive if the company were to liquidate.
The report must be submitted as a 2- to 3-page Word document with double spacing, 12-point Times New Roman font, one-inch margins. Your accompanying spreadsheets must be submitted as Microsoft Excel files.
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