You are a partner in a limited accounting firm and have

Assignment Help Business Management

Reference no: EM13351914

You are a partner in a limited accounting firm and have been engaged by Floyd Barber and Andy Taylor to assist them in starting a new business. This trade will sell new and used bicycles to the general public. Andy has been productively selling bicycles out of his garage and believes that he requires a retail store to grow the business. Floyd owns a building that has been vacant for numerous years and has been looking for a business in which to invest. They are trying to choose if they should incorporate or form a partnership. They have asked you to create a short presentation for them that will describe the pros and cons of corporations and partnerships

Both plan to offer an equal amount of time to the business and share any profits or losses evenly. Your presentation should conclude with your suggestion of the entity that they should adopt based on the facts as presented to you. You should list three primary causes for your recommendation.

In addition to your presentation you should purpose a memorandum to them explaining the basis each of them will have in the partnership or corporation as well as the basis of the liabilities and assets to the partnership or corporation.

Andy will contribute the following:

Cash $10,000

Accounts Receivable $5,000

Inventory of Bicycles at cost $22,000 (sales value = $48,000)

Accounts Payable $2,000.

Floyd will contribute the following:

Cash $15,000

Land at cost $10,000 (market value $15,000)

Building

Cost $ 120,000 (market value $80,000)

Useful life 40 years

Residual Value $20,000

Accumulated depreciation to date $5,000 (2 years @ straight line method)

Mortgage payable $70,000, interest only payable monthly, balance due in 8 years.

Reference no: EM13351914

Questions Cloud

The central area well-baby clinic gives a variety of health : the central area well-baby clinic gives a variety of health services to newborn babies and their parents. the clinic is

Q in a mutant strain of e coli a trna that recognizes the : q. in a mutant strain of e. coli a trna that recognizes the codon 5 cug 3 of normal cells has a point mutation so that

Legal underpinnings of business lawimagine that you own all : legal underpinnings of business lawimagine that you own all of the following businesses-tinkers home security service

Q1 when corporate income taxes are assumed to exist : q1. when corporate income taxes are assumed to exist modigliani miller and the traditional theorists agree that capital

You are a partner in a limited accounting firm and have : you are a partner in a limited accounting firm and have been engaged by floyd barber and andy taylor to assist them in

Q1 yellow guinea pigs y crossed with white y guinea pigs : q1. yellow guinea pigs y crossed with white y guinea pigs always produce cream colored offspring. what kind of

Qa consumer who conforms to the von neumann morgenstern : q.a consumer who conforms to the von neumann morgenstern axioms is faced with four situations a b c d. he prefers a to

Q1 the atpadp ratio in the actively respiring yeast cell is : q1. the atpadp ratio in the actively respiring yeast cell is about 10. what must the intracellular 3-phosphoglycerate1

Q1 suppose that the government imposed a 1 tax each time : q1. suppose that the government imposed a 1 tax each time someone used the atm. how would this effect output and the

User Account

All Pages