Prompt: In milestone one, you will complete a report covering Section 1 and Part A of Section 11 of the final project. In the report you will discuss the key issues of partnership, such as formation, slitting 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:
1. Partnership: The company is considering formatting a partnership and want to be sure it understands the key issues regarding partnership formation, income distribution, and liquidation.
A. Explain the process and methods use to account for partnership formation. How does these method 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.
11. Corporation: The company is also considering structuring its business as a corporation, but it 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 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. Ensure all information is entered accurately. Please refer to the Illustration (Exhibit 13.2) on page 592 from your textbook to view potential calculations.
Partnership: Formation Explains the process and methods used to account for partnership formation and how they impact the firm’s balance sheet
Partnership: Split Illustrates the options for distribution of profits and ensures all information is entered accurately
Partnership: Dissolve Describes what happens in partnership dissolution or partner insolvency
Partnership: Cash Distribution Schedule Illustrate the dissolution process by providing and example of a cash distribution schedule, ensuring accuracy
Corporation: Voluntary bankruptcy Summarizes the key points of interest if the firm had to file bankruptcy and discusses the ethical implications that should be considered
Corporation: Forced Bankruptcy Identifies the key areas of concern if the firm was forced into bankruptcy and the defenses available in this situation
Corporation: Liquidate Illustrates calculations and ensures all information is entered accurately
Articulation of Response Submission has no major errors related to citations, grammar, spelling, syntax, or organization