Examine business partnership formations

Reference no: EM133294680 , Length: word count:600

Assignment - The Partnership Dilemma

Learning outcome 1: Examine business partnership formations for their implications on partners' equity accounts.

Overview
This assignment provides an opportunity to apply your knowledge of partnership types, including differences in the handling of capital accounts. You will apply your knowledge to a case study to discover the advantages and disadvantages of each partnership type, as well as their operational and ethical implications.

Scenario
Debra and Lori operate a nail salon business as partners who share profits and losses equally. The success of their business has exceeded their expectations, and the nail salon is operating at a profitable level.

The partners have quite different approaches to operating the business, however. Lori is anxious to maximize profits, so she schedules appointments from 8:00 AM to 6:00 PM daily. She even sacrifices some lunch hours to accommodate regular customers. Debra, by contrast, schedules her appointments from 9:00 AM to 5:00 PM and takes long lunch hours. Debra regularly makes significantly larger withdrawals of cash than Lori does. She tells Lori not to worry, however: "I never make a withdrawal without letting you know, so it is properly recorded in my drawing account and charged against my capital at the end of the year." To date, Debra's withdrawals are twice as much as Lori's withdrawals.

Imagine that you are an accountant who has been hired by the nail salon owners to provide recommendations regarding their partnership, ethical considerations, and financial reporting. You will provide your findings to the clients in a PowerPoint presentation that you complete in the Week 8 Assignment - Partnership Dilemma template provided.

Instructions
Download the template: Week 8 Assignment - Partnership Dilemma. Complete the following in your presentation:

Slide 1: The title of the presentation has been provided for you. Add your name, the date of submission, and the professor's name to this slide. The title page should look professional.

Slide 2: Explain 4 factors from the scenario that contribute to the dilemma.

The scenario includes information about the partners' behavior, business communication style, and business operations that will change overall profit. Include all details needed to show both partners' obligations to the partnership and the nature of the dilemma the partners face.

Use your own words. Do not copy and paste the information in the scenario.

Slide 3: Outline 4 major components of partnership agreements.
Rely on the course readings about partnership agreement for this information.

Slide 4: Describe the advantages and disadvantages of two types of partnerships.

Slide 5: Identify 4 ethical concerns with Debra's and Lori's actions related to business communication.

Slide 6: Propose changes to the partnership agreement that address the differences in Debra's and Lori's work and withdrawal habits. Be sure to explain how these changes will address the differences.

Slide 7: Explain 4 effects on the partnership's financial statements that will result from the changes you proposed.

Slide 8: Sources. Use 3 or more quality sources to support your writing. Choose sources that are credible, relevant, and appropriate. Cite each source listed on your source page at least one time within your assignment. For help with research, writing, and citation, access the library or review library guides.

Reference no: EM133294680

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