财务会计英语课件

Chapter13PartnershipsandLimitedLiabilityCorporationsAccounting,21stEditionWarrenReeveFessPowerPointPresentationbyDouglasCloud

ProfessorEmeritusofAccounting

PepperdineUniversity

© Copyright2004South-Western,adivisionofThomsonLearning.Allrightsreserved.TaskForceImageGalleryclipartincludedinthiselectronicpresentationisusedwiththepermissionofNVTechInc.Chapter13PartnershipsandLim1Someoftheactionhasbeenautomated,soclickthemousewhenyouseethislightningboltinthelowerright-handcornerofthescreen.Youcanpointandclickanywhereonthescreen.Someoftheactionhasbeenau21. Describethebasiccharacteristicsofproprietorships,corporations,partnerships,andlimitedliabilitycorporation.2. Describeandillustratetheequityreportingforproprietorships,corporations,partnerships,andlimitedliabilitycorporations.3. Describeandillustratetheaccountingforformingapartnership.ObjectivesAfterstudyingthischapter,youshouldbeableto:1. Describethebasiccharacte34. Describeandillustratetheaccountingfordividingthenetincomeandnetlossofapartnership.Objectives5. Describeandillustratetheaccountingforthedissolutionofapartnership.6. Describeandillustratetheaccountingforliquidationofapartnership.7. Describethelifecycleofabusiness,includingtheroleofventurecapitalists,initialpublicofferings,andunderwriters.4. Describeandillustratethe4AlternativeFormsofBusinessEntitiesAdvantagesEaseinorganizingLowcostoforganizingDisadvantagesDifficultyinraisinglargeamountsofcapitalUnlimitedliabilityJoe’sReviewofChapter1Aproprietorship

isownedbyoneindividual.AlternativeFormsofBusiness5AlternativeFormsofBusinessEntitiesAcorporationisorganizedunderstateorfederalstatutesasaseparatelegalentity.AdvantagesTheabilitytoobtainlargeamountsofresourcesbyissuingstocksLimitedliabilityfortheownersDisadvantagesDoubletaxationMorecomplexityandregulationsJ&M,Inc.AlternativeFormsofBusiness6AlternativeFormsofBusinessEntitiesJ&M,Inc.AbusinessmayorganizeasanSCorporation.TheIRSallowsincometopassthroughtheSCorporationtotheindividualstockholderwithoutthecorporationhavingtopaytaxontheincome.AlternativeFormsofBusiness7AlternativeFormsofBusinessEntitiesApartnershipisanassociationoftwoormoreindividuals.AdvantagesMorefinancialresourcesthanaproprietorshipAdditionalmanagementskillsJoeandMarty’sAlternativeFormsofBusiness8AlternativeFormsofBusinessEntitiesDisadvantagesLimitedlifeUnlimitedliabilityCo-ownershipofpartnershippropertyMutualagencyJoeandMarty’sApartnershipisanassociationoftwoormoreindividuals.AlternativeFormsofBusiness9AlternativeFormsofBusinessEntitiesAnimportantrightofpartnersistoparticipateintheincomeofthepartnership.AlternativeFormsofBusiness10AlternativeFormsofBusinessEntitiesEachpartnermustreporttheirshareofpartnershipincomeontheirpersonaltaxreturns.AlternativeFormsofBusiness11AlternativeFormsofBusinessEntitiesApartnershipiscreatedbyacontract,knownasthepartnershipagreementorarticlesofpartnership.AlternativeFormsofBusiness12AlternativeFormsofBusinessEntitiesAvariantoftheregularpartnershipisalimitedpartnership.Thisformofpartnershipallowspartnersthatarenotinvolvedintheoperationsofthepartnershiptoretainlimitedliability.AlternativeFormsofBusiness13LimitedLiabilityCorporationsCombinestheadvantagesofthecorporateandpartnershipforms.Ownersaretermed“members”ratherthan“partners.”Membersmustcreateanoperatingagreement.LLCmayelecttobetreatedasapartnershipfortaxpurposes.ContinuedLimitedLiabilityCorporations14LimitedLiabilityCorporationsUnlessspecifiedintheoperatingagreement,LLCshavealimitedlife.MembersmayelectoperatingtheLLCasa“membermanaged”entity.LLCprovideslimitedliabilityforthemembers.LLCsmustfile“articlesoforganization”withstategovernmentalauthorities.LimitedLiabilityCorporations15ComparisonofAlternateEntityCharacteristicsEaseofFormationProprietorship SimpleCorporation ComplexPartnership SimpleLLC ModerateComparisonofAlternateEntity16ComparisonofAlternateEntityCharacteristicsLegalLiabilityProprietorship NolimitationCorporation LimitedliabilityPartnership NolimitationLLC LimitedliabilityComparisonofAlternateEntity17ComparisonofAlternateEntityCharacteristicsTaxationProprietorship NontaxableentityCorporation TaxableentityPartnership NontaxableentityLLC NontaxableentitybyelectionComparisonofAlternateEntity18ComparisonofAlternateEntityCharacteristicsLimitationonLifeofEntityProprietorship YesCorporation NoPartnership YesLLC YesComparisonofAlternateEntity19ComparisonofAlternateEntityCharacteristicsEaseofRaisingCapitalProprietorship DifficultCorporation EasierPartnership ModerateLLC ModerateComparisonofAlternateEntity20EquityReportingforAlternativeEntityFormsProprietorshipsProprietorshipsuseacapitalaccounttorecordinvestmentsbytheownerofthebusiness.Withdrawalsbytheownerarerecordedintheowner’sdrawingaccount.EquityReportingforAlternati21EquityReportingforAlternativeEntityFormsProprietorshipsGreeneLandscapesStatementofOwner’sEquityFortheyearendedDecember31,2006DuncanGreene,capital,Dec.31,2005 $345,000Netincome $79,000Lesswithdrawals 35,000Increaseinowner’sequity 44,000DuncanGreene,capital,Dec.31,2006 $389,000EquityReportingforAlternati22EquityReportingforAlternativeEntityFormsCorporationsInvestmentsbystockholdersinthebusinessusecapitalstockaccounts,suchasCommonStockandPreferredStock.Dividendstoowners(stockholders)arerecordedbyadebittoRetainedEarnings.EquityReportingforAlternati23EquityReportingforAlternativeEntityFormsCorporationsEquityReportingforAlternati24EquityReportingforAlternativeEntityFormsPartnershipsandLimitedLiabilityCorporationsInvestmentsandwithdrawalsforpartnershipsissimilartoproprietorships,exceptthereisacapitalanddrawingaccountforeachpartner.Limitedliabilitycorporationsaresimilartoapartnershipexceptthateachownerisreferredtoas“member.”EquityReportingforAlternati25EquityReportingforAlternativeEntityFormsPartnershipsEquityReportingforAlternati26

FormingaPartnershipJosephStevensandEarlFosteragreetocombinetheirhardwarebusinessesinapartnership.Theyagreethatthepartnershipistoassumetheliabilitiesoftheseparatebusinesses.Apr. 1 Cash 720000 AccountsReceivable 1630000 MerchandiseInventory 2870000 StoreEquipment 540000 OfficeEquipment 150000 AllowanceforDoubtfulAccounts 150000AccountsPayable 260000JosephStevens,Capital 5500000Stevens’TransferofAssets,Liability,andEquityFormingaPartnershipJosephS27

FormingaPartnershipAsimilarentrywouldbemadefortheassets,liabilities,andequityofEarlFoster.FormingaPartnershipAsimila28

FormingaPartnershipAssumethatinsteadofformingapartnership,thetwomenformedalimitedliabilitycorporation.Apr. 1 Cash 720000 AccountsReceivable 1630000 MerchandiseInventory 2870000 StoreEquipment 540000 OfficeEquipment 150000 AllowanceforDoubtfulAccounts 150000AccountsPayable 260000JosephStevens,MemberEquity 5500000Stevens’TransferofAssets,Liability,andEquityFormingaPartnershipAssumet29

DividingIncomeServicesofPartnersThepartnershipagreementofJenniferStoneandCrystalMillsprovidesforStonetohaveanannualsalaryallowanceof$30,000andMillsistoreceive$24,000.Anynetincomeistobedividedequally.Thefirmhadanetincomeof$75,000.

J.StoneC.MillsTotalSalaryallowance $30,000 $24,000 $54,000Remainingincome 10,500 10,500 21,000Divisionofnetincome $40,500 $34,500 $75,000DividingIncomeServicesofPa30

DividingIncomeServicesofPartnersDec. 31 IncomeSummary 7500000 JenniferStone,Capital 4050000CrystalMills,Capital 3450000DividingIncomeServicesofPa31

DividingIncomeLLCAlternativeDec. 31 IncomeSummary 7500000 JenniferStone,MemberEquity 4050000CrystalMills,MemberEquity 3450000DividingIncomeLLCAlternativ32

DividingIncomeServicesofPartnersandInvestmentsThepartnershipagreementofJenniferStoneandCrystalMillsprovidesforStonetohaveanannualsalaryallowanceof$30,000andMillsistoreceive$24,000.Interestof12%isprovidedoneachpartner’scapitalbalanceonJanuary1.Anynetincomeistobedividedequally.Thefirmhadanetincomeof$75,000.DividingIncomeServicesofPa33

DividingIncomeServicesofPartnersandInvestments

J.StoneC.MillsTotalSalaryallowance $30,000 $24,000 $54,000Interestallowance 9,600 7,200 16,800Divisionofnetincome $41,700 $33,300 $75,000$80,000x12%$60,000x12%Remainingincome 2,100 2,100 4,200DividingIncomeServicesofPa34

DividingIncomeServicesofPartnersDec. 31 IncomeSummary 7500000 JenniferStone,Capital 4170000CrystalMills,Capital 3330000DividingIncomeServicesofPa35

DividingIncomeLLCAlternativeDec. 31 IncomeSummary 7500000 JenniferStone,MemberEquity 4170000CrystalMills,MemberEquity 3330000DividingIncomeLLCAlternativ36

DividingIncomeAllowancesExceedNetIncomeAssumethesamefactsasbeforeexceptthatthenetincomeisonly$50,000.

J.StoneC.MillsTotalSalaryallowance $30,000 $24,000 $54,000Interestallowance 9,600

7,200

16,800Total $39,600 $31,200 $70,800Divisionofnetincome $29,200 $20,800 $50,000Deductexcessequally 10,400 10,400 20,800DividingIncomeAllowancesExc37PartnershipDissolutionAdmittingaPartner1.

Purchasinganinterestfromoneormoreofthecurrentpartners.2.

Contributingassetstothepartnership.Apersonmaybeadmittedtoapartnershiponlywiththeconsentofallpartnersby:PartnershipDissolutionAdmitti38PartnershipDissolutionPurchasinganInterestinaPartnershipPartnersTomAndrewsandNathanBellhavecapitalbalancesof$50,000each.OnJune1,eachsellsone-fifthofhisequitytoJoeCanterfor$10,000incash.PartnershipDissolutionPurchas39PartnershipDissolutionPurchasinganInterestinaPartnershipJune 1 TomAndrews,Capital 1000000 NathanBell,Capital 1000000 JoeCanter,Capital 2000000ForaLLC,members’equityaccountswouldhavebeenusedratherthancapitalaccounts.PartnershipDissolutionPurchas40PartnershipDissolutionContributingAssetstoaPartnershipPartnersDonaldLewisandGeraldMortonhavecapitalbalancesof$35,000and$25,000,respectively.OnJune1,SharonNelsonjoinsthepartnershipbypermissionandmakesaninvestmentof$20,000cash.PartnershipDissolutionContrib41PartnershipDissolutionContributingAssetstoaPartnershipJune 1 Cash 2000000 SharonNelson,Capital 2000000ForaLLC,SharonNelson,MemberEquitywouldhavebeencredited.PartnershipDissolutionContrib42PartnershipDissolutionRevaluationofAssetsPartnersDonaldLewisandGeraldMortonhavecapitalbalancesof$35,000and$25,000,respectively.ThebalanceinMerchandiseInventoryis$14,000andthecurrentreplacementvalueis$17,000.Thepartnerssharenetincomeequally.PartnershipDissolutionRevalua43PartnershipDissolutionJune 1 MerchandiseInventory 300000DonaldLewis,Capital 150000GeraldMorton,Capital 150000BecausetheLLCalternativefollowsapatternofreplacing“Capital”with“MemberEquity,”theLLCentrywillnotbeshownagain.RevaluationofAssetsPartnershipDissolutionJune 1 44PartnershipDissolutionPartnerBonusesOnMarch1,thepartnershipofMarshaJenkinsandHelenKrameradmitAlexDiazasanewpartner.TheassetsoftheoldpartnershipareadjustedtoafairmarketvaluesandtheresultingcapitalbalancesforJenkinsandKramerare$30,000and$24,000,respectively.PartnershipDissolutionPartner45PartnershipDissolutionPartnerBonusesJenkinsandKrameragreetoadmitDiazasapartnerfor$31,000.Inreturn,Diazwillreceiveaone-thirdequityinthepartnershipandwillshareincomeandlossesequallywithJenkinsandKramer.PartnershipDissolutionPartner46PartnershipDissolutionPartnerBonusesfromNewPartnerEquityofJenkins $20,000EquityofKramer 24,000Diaz’sContribution 31,000TotalequityafteradmittingDiaz $75,000Diaz’sinterest(1/3x$75,000) $25,000Diaz’scontribution $31,000Diaz’sequityafteradmission 25,000BonuspaidtoJenkinsandKramer $6,000PartnershipDissolutionPartner47PartnershipDissolutionPartnerBonusesMar. 1 Cash 3100000AlexDiaz,Capital 2500000MarshaJenkins,Capital 300000HelenKramer,Capital 300000$6000÷2PartnershipDissolutionPartner48PartnershipDissolutionPartnerBonusesAfteradjustingthemarketvalues,thecapitalbalanceofJaniceCowenis$80,000andthecapitalbalanceofSteveDoddis$40,000.EllenChuareceivesaone-fourthinterestinthepartnershipforacontributionof$30,000.BeforeadmittingChua,CowenandDoddsharednetincomeusinga2to1ratio.PartnershipDissolutionPartner49PartnershipDissolutionPartnerBonusestoNewPartnerEquityofCowen $80,000EquityofDodd 40,000Chua’sContribution 30,000TotalequityafteradmittingChua $150,000Chua’sinterest(1/4x$150,000) $37,500Chua’scontribution $30,000Chua’sequityafteradmission 37,500BonuspaidtoChua $7,500PartnershipDissolutionPartner50PartnershipDissolutionPartnerBonusesMar. 1 Cash 3000000 JaniceCowen,Capital 500000 SteveDodd,Capital 250000EllenChua,Capital 37500001/3x$7,5002/3x$7,500PartnershipDissolutionPartner51LiquidatingPartnershipsWhenapartnershipgoesoutofbusiness,thewinding-upprocessiscalledtheliquidationofapartnership.LiquidatingPartnershipsWhena52LiquidatingPartnershipsThesaleoftheassetsiscalledrealization.LiquidatingPartnershipsThesa53LiquidatingPartnershipsFarley,Greene,andHallshareincomeandlossesinaratioof5:3:2.OnApril9,afterdiscontinuingoperations,thefirmhadthefollowingtrialbalance.Cash $11,000NoncashAssets 64,000Liabilities $9,000JeanFarley,Capital 22,000BradGreene,Capital 22,000AliceHall,Capital 22,000Total $75,000 $75,000LiquidatingPartnershipsFarley54LiquidatingPartnershipsBetweenApril10andApril30,2006,Farley,Greene,andHallsellallnoncashassetsfor$72,000.GainonRealizationLiquidatingPartnershipsBetwee55LiquidatingPartnershipsBalancebeforerealization $11,000 $64,000 $9,000Leftsideofstatement

Noncash

CashAssetsLiabilitiesSaleofassetsanddivision ofgain +72,000 -64,000 —LiquidatingPartnershipsBalanc56LiquidatingPartnershipsBalancebeforerealization $22,000 $22,000 $22,000Rightsideofstatement

FarleyGreeneHall

CapitalCapitalCapitalSaleofassetsanddivision ofgain +4,000 +2,400 +1,600$8,000gainx.50$8,000gainx.30$8,000gainx.20LiquidatingPartnershipsBalanc57LiquidatingPartnershipsBalancebeforerealization $11,000 $64,000 $9,000Leftsideofstatement

Noncash

CashAssetsLiabilitiesSaleofassetsanddivision ofgain +72,000

–64,000

—Balanceafterrealization $83,000 $0 $9,000LiquidatingPartnershipsBalanc58LiquidatingPartnershipsBalancebeforerealization $22,000 $22,000 $22,000Rightsideofstatement

FarleyGreeneHall

CapitalCapitalCapitalSaleofassetsanddivision ofgain +4,000

+2,400

+1,600Balanceafterrealization $26,000 $24,400 $23,600 LiquidatingPartnershipsBalanc59LiquidatingPartnershipsThepartnership’sliabilitiesarepaid,$9,000.GainonRealizationLiquidatingPartnershipsThepa60LiquidatingPartnershipsLeftsideofstatement

Noncash

CashAssetsLiabilitiesBalancebeforerealization $11,000 $64,000 $9,000Saleofassetsanddivision ofgain +72,000

–64,000

—Balanceafterrealization $83,000 $0 $9,000Paymentofliabilities –9,000 — –9,000LiquidatingPartnershipsLefts61LiquidatingPartnershipsLeftsideofstatement

Noncash

CashAssetsLiabilitiesBalancebeforerealization $11,000 $64,000 $9,000Saleofassetsanddivision ofgain +72,000

–64,000

—Balanceafterrealization $83,000 $0 $9,000Paymentofliabilities –9,000

—

–9,000Balanceafterpayment $74,000 $0 $0LiquidatingPartnershipsLefts62LiquidatingPartnershipsTheremainingcash,$74,000,ispaidtoeachpartnerinaccordancewiththepartner’scapitalbalance.GainonRealizationLiquidatingPartnershipsThere63LiquidatingPartnershipsLeftsideofstatement

Noncash

CashAssetsLiabilitiesBalancebeforerealization $11,000 $64,000 $9,000Saleofassetsanddivision ofgain +72,000

–64,000

—Balanceafterrealization $83,000 $0 $9,000Paymentofliabilities –9,000

—

–9,000Balanceafterpayment $74,000 $0 $0Partners’cashdistributed –74,000

—

—Finalbalances $0 $0 $0LiquidatingPartnershipsLefts64LiquidatingPartnershipsRightsideofstatementBalancebeforerealization $22,000 $22,000 $22,000

FarleyGreeneHall

CapitalCapitalCapitalSaleofassetsanddivision ofgain +4,000

+2,400

+1,600Balanceafterrealization $26,000 $24,400 $23,600Paymentofliabilities —

—

—

Balanceafterpayment $26,000 $24,400 $23,600Partners’cashdistributed –26,000

–24,400

–23,600

Finalbalances $0 $0 $0LiquidatingPartnershipsRight65LiquidatingPartnershipsSaleofAssetsApr. 30 Cash 7200000 NoncashAssets 6400000GainonRealization 800000LiquidatingPartnershipsSaleo66LiquidatingPartnershipsDivisionofGainApr. 30 GainonRealization 800000 JeanFarley,Capital 400000BradGreene,Capital 240000AliceHall,Capital 160000LiquidatingPartnershipsDivisi67LiquidatingPartnershipsPaymentofLiabilitiesApr. 30 Liabilities 900000 Cash 900000LiquidatingPartnershipsPaymen68LiquidatingPartnershipsDistributionofCashtoPartnersApr. 30 JeanFarley,Capital 2600000 BradGreene,Capital 2440000 AliceHall,Capital 2360000Cash 7400000LiquidatingPartnershipsDistri69LiquidatingPartnershipsBetweenApril10andApril30,2006,Farley,Greene,andHallsellallnoncashassetsfor$44,000.LossonRealizationLiquidatingPartnershipsBetwee70LiquidatingPartnershipsBalancebeforerealization $11,000 $64,000 $9,000Leftsideofstatement

Noncash

CashAssetsLiabilitiesSaleofassetsanddivision ofloss +44,000 –64,000 —LiquidatingPartnershipsBalanc71LiquidatingPartnershipsBalancebeforerealization $22,000 $22,000 $22,000Rightsideofstatement

FarleyGreeneHall

CapitalCapitalCapitalSaleofassetsanddivision ofloss –10,000 –6,000 –4,000$20,000lossx.50$20,000lossx.30$20,000lossx.20LiquidatingPartnershipsBalanc72LiquidatingPartnershipsBalancebeforerealization $11,000 $64,000 $9,000Leftsideofstatement

Noncash

CashAssetsLiabilitiesSaleofassetsanddivision ofloss +44,000

–64,000

—Balanceafterrealization $55,000 $0 $9,000LiquidatingPartnershipsBalanc73LiquidatingPartnershipsBalancebeforerealization $22,000 $22,000 $22,000Rightsideofstatement

FarleyGreeneHall

CapitalCapitalCapitalSaleofassetsanddivision ofloss –10,000

–6,000

–4,000Balanceafterrealization $12,000 $16,000 $18,000LiquidatingPartnershipsBalanc74LiquidatingPartnershipsTheliabilitiesofthepartnershiparepaid,$9,000.LossonRealizationLiquidatingPartnershipsTheli75LiquidatingPartnershipsLeftsideofstatement

Noncash

CashAssetsLiabilitiesBalancebeforerealization $11,000 $64,000 $9,000Saleofassetsanddivision ofloss +44,000

–64,000

—Balanceafterrealization $55,000 $0 $9,000Paymentofliabilities –9,000 — –9,000LiquidatingPartnershipsLefts76LiquidatingPartnershipsLeftsideofstatement

Noncash

CashAssetsLiabilitiesBalancebeforerealization $11,000 $64,000 $9,000Saleofassetsanddivision ofloss +44,000

–64,000

—Balanceafterrealization $55,000 $0 $9,000Paymentofliabilities –9,000

—

–9,000Balanceafterpayment $46,000 $0 $0LiquidatingPartnershipsLefts77LiquidatingPartnershipsTheremainingcash,$46,000,ispaidtoeachpartnerinaccordancewiththepartner’scapitalbalance.LossonRealizationLiquidatingPartnershipsThere78LiquidatingPartnershipsLeftsideofstatement

Noncash

CashAssetsLiabilitiesBalancebeforerealization $11,000 $64,000 $9,000Saleofassetsanddivision ofloss +44,000

–64,000

—Balanceafterrealization $55,000 $0 $9,000Paymentofliabilities –9,000

—

–9,000Balanceafterpayment $46,000 $0 $0Partners’cashdistributed –46,000

—

—Finalbalances $0 $0 $0LiquidatingPartnershipsLefts79LiquidatingPartnershipsRightsideofstatementBalancebeforerealization $22,000 $22,000 $22,000

FarleyGreeneHall

CapitalCapitalCapitalSaleofassetsanddivision ofloss –10,000

–6,000

–4,000Balanceafterrealization $12,000 $16,000 $18,000Paymentofliabilities —

—

—

Balanceafterpayment $12,000 $16,000 $18,000Partners’cashdistributed –12,000

–16,000

–18,000

Finalbalances $0 $0 $0LiquidatingPartnershipsRight80LiquidatingPartnershipsSaleofAssetsApr. 30 Cash 4400000 LossonRealization 2000000NoncashAssets 6400000LiquidatingPartnershipsSaleo81LiquidatingPartnershipsDivisionofLoss

BradGreene,Capital 600000 AliceHall,Capital 400000 LossonRealization 2000000Apr.30 JeanFarley,Capital 1000000LiquidatingPartnershipsDivisi82LiquidatingPartnershipsPaymentofLiabilitiesApr. 30 Liabilities 900000 Cash 900000LiquidatingPartnershipsPaymen83LiquidatingPartnershipsDistributiontoPartnersApr. 30 JeanFarley,Capital 1200000 BradGreene,Capital 1600000 AliceHall,Capital 1800000Cash 4600000LiquidatingPartnershipsDistri84LifecycleofaBusinessBusinessStagePrincipalAdvantageDella’sDelights,ProprietorshipJeffJacobi,ProprietorFormeasily:Jacobiformsabusinessbyobtainingalocalbusinesslicenseandopeningabankaccount.Della’sDelights,PartnershipJacobiandLange,PartnersExpandcapitalandexpertise:Jacobiadmitsanewpartnerthatcontributescapitalandexpertise.ContinuedLifecycleofaBusinessBusines85LifecycleofaBusinessBusinessStagePrincipalAdvantageDella’sDelights,LLCLimitlegalliability:ThepartnershipischangedtoanLLCtolimitlegalliabilityofowners.Della’sDelights,Inc.Simplifyraisingcapital:TheLLCischangedtoacorporationtoraisecapitalfromthepublic.ContinuedLifecycleofaBusinessBusines86LifecycleofaBusinessBusinessStagePrincipalAdvantageDella’sDelights,Inc.adivisionofInternationalFoods,Inc.Provideexit:Thecompanyissoldforcash.LifecycleofaBusinessBusines87Aventurecapitalistisanindividualorfirmthatprovidesequityfinancingforanewcompany.Aventurecapitalistisanind88TheEndChapter13TheEndChapter1389Chapter13PartnershipsandLimitedLiabilityCorporationsAccounting,21stEditionWarrenReeveFessPowerPointPresentationbyDouglasCloud

ProfessorEmeritusofAccounting

PepperdineUniversity

© Copyright2004South-Western,adivisionofThomsonLearning.Allrightsreserved.TaskForceImageGalleryclipartincludedinthiselectronicpresentationisusedwiththepermissionofNVTechInc.Chapter13PartnershipsandLim90Someoftheactionhasbeenautomated,soclickthemousewhenyouseethislightningboltinthelowerright-handcornerofthescreen.Youcanpointandclickanywhereonthescreen.Someoftheactionhasbeenau911. Describethebasiccharacteristicsofproprietorships,corporations,partnerships,andlimitedliabilitycorporation.2. Describeandillustratetheequityreportingforproprietorships,corporations,partnerships,andlimitedliabilitycorporations.3. Describeandillustratetheaccountingforformingapartnership.ObjectivesAfterstudyingthischapter,youshouldbeableto:1. Describethebasiccharacte924. Describeandillustratetheaccountingfordividingthenetincomeandnetlossofapartnership.Objectives5. Describeandillustratetheaccountingforthedissolutionofapartnership.6. Describeandillustratetheaccountingforliquidationofapartnership.7. Describethelifecycleofabusiness,includingtheroleofventurecapitalists,initialpublicofferings,andunderwriters.4. Describeandillustratethe93AlternativeFormsofBusinessEntitiesAdvantagesEaseinorganizingLowcostoforganizingDisadvantagesDifficultyinraisinglargeamountsofcapitalUnlimitedliabilityJoe’sReviewofChapter1Aproprietorship

isownedbyoneindividual.AlternativeFormsofBusiness94AlternativeFormsofBusinessEntitiesAcorporationisorganizedunderstateorfederalstatutesasaseparatelegalentity.AdvantagesTheabilitytoobtainlargeamountsofresourcesbyissuingstocksLimitedliabilityfortheownersDisadvantagesDoubletaxationMorecomplexityandregulationsJ&M,Inc.AlternativeFormsofBusiness95AlternativeFormsofBusinessEntitiesJ&M,Inc.AbusinessmayorganizeasanSCorporation.TheIRSallowsincometopassthroughtheSCorporationtotheindividualstockholderwithoutthecorpora