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1 Feb 2018

2-Part discussion:

Part 1:
Jerry is confused about the partnership characteristics of (a)mutual agency and (b) unlimited liability. Explain these twocharacteristics for Jerry.

Part 2:
Brent Houghton and Dick Kreibach are considering a businessventure. They ask you, as business consultant, to explain theadvantages and disadvantages of the partnership vs. corporationform of organization. Please provide them with your advice.

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Jarrod RobelLv2

3 Feb 2018

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You have recently been hired as the business manager of a dentaloffice. Your employers, the two dentists that own the practice, areconsidering a number of changes to their practice. Using theinformation youâve learned in this course and generally in yourdegree and the facts provided on the next page, please draft ananswer to each of the questions provided on the next page. Youranswer should be a minimum of three pages in length (though it maybe considerably longer) and should address each of the providedquestions. Please explain your work and any calculations that youcomplete as part of that work. Finally, for all questions butquestion 1, please make the following assumptions:

1. The federal income tax rate is 39.6%.

2. The C-corporate income tax rate is 35%.

3. The Self-Employment tax rate is 15.3%.

4. The Social Security tax rate is 6.2% (employer) and 6.2%(employee).

5. The Medicare tax rate is 1.45% (employer) and (1.45(employee).

6. The Medicare Surtax does apply.

7. The maximum Section 179 amount is $100,000 per year. 50%bonus depreciation is available.

If you make any other assumptions in your case analysis, pleasenotate them and explain your reasoning.

Currently, the business is organized as a partnership. Each ofthe dentists takes a $20,000 monthly draw from the business as aguaranteed payment. They have a staff dentist who is an employee ofthe practice who is paid $140,000 per year. In the current year,the businessâs profits after payment of the guaranteed payments areexpected to be an additional $800,000, which is divided equallybetween the owners.

Currently the business reports its taxes on the cash basis. Thebusiness is located in a rural renewal community; however, thebusiness does not currently complete any paperwork relating to thework opportunity tax credit. The business owners are grateful thesmall community in which they have made their business andregularly donate 20% of the businessâs net profit to localreligious and charitable organizations. The businessowners would like to upgrade their X-Ray equipment to expand thebusinessâs offerings. They are proposing to spend $400,000 on thenew equipment and expect the equipment to generate incrementalearnings of $80,000 a year for each of the next 8 years.

The owners are considering alternate organizationalstructures.What structure that we learned about will yield thelowest total tax burden for both the business and the owners?Howmuch will that tax burden be and what taxes will it comprise?Whatare the ownersâ and the businessâs marginal tax rates under yourrecommended structure?

ochrescorpion556

small business management class:

Please answer the three question from the article below:

Q1)In setting up an accounting system, which one of theaccounting functions is best illustrated in the article? Explainhow you know. ?

Q2)Which one of the five common financial statements is bestillustrated in the article? Provide facts to support youranswer?

Q3)Which one of the uses of financial accounting is bestillustrated in the article? Explain how you know. ?

The article:

HUGH MCHUGH, owner of Overhill Flowers Inc. in the Philadelphianeighborhood of Overbrook, made a declaration a few years ago. "Nomore house accounts," he told his staff.

These accounts offering credit were a business staple for theflorist for years, covering about 85% of his business. Hospitals,corporations and other customers would order flowers, and he'd billthem at the end of the month, dutifully printing out statements,mailing them, processing the checks. Sixty days would often elapsebetween the time flowers were delivered and when the bill was paid.Customers often paid late, and about 2% didn't pay at all. "That'sa significant blow to a small business with profit margins of 12%,"he says.

Now, if anyone asks to open a house account, he requests acredit- card number, so he can collect immediately; for thosealready with house accounts, he got their approval to switch themto credit-card accounts. The simple change has not only ensuredthat he'll be paid, but it also has smoothed out the bumps of cashflow, as well, so that now in January, he isn't nervous aboutmaking payroll while he awaits payment for holiday bouquets.

Collecting debts efficiently, Mr. McHugh realized, is one of thebest ways for small businesses to manage the ebb and flow of cashand hang on to precious capital. It's not unusual for businesses toborrow, often at high interest rates, or sell chunks of equity thatthey'd rather keep, because they've managed collections poorly. Butmost entrepreneurs would rather focus on their product, theirservice, their marketing, their lease, their health insurance --anything -- before dealing with the gritty work of collections.

"One thing business owners always tell me is that they neverthought about this when they started their own business," saysMichelle Dunn, who owned her own collections agency, M.A.D.Collections, for years, and has written several books on thetopic.

The time for an entrepreneur to think about collecting fromcustomers is when he or she is writing the business plan, says Ms.Dunn of Plymouth, N.H. She advises businesses to establish a"credit policy" mandating that before they hand over a product to acustomer who says "bill me," they will run a credit check on thebuyer. She also advises small businesses to join Equifax or someother credit bureau to be able to pull credit reports for anyoneapplying for credit, and also to report late payers.

Small start-ups, she says, are often so happy to have customersthat they are slow to take action for nonpayment. That's a mistake,she says. It's best to promptly make a phone call, and follow upwith a letter, so the nonpayer understands that it's a seriousmatter. Any payment at all on the account -- even $5 -- isworthwhile, she says, because it establishes a legal recordacknowledging the debt. "Once you get any kind of payment towardtheir balance, they have to pay the rest if you wind up in court,"she says.

Her years spent tracking debtors have honed unusual instincts.She has found, for instance, that when she would call a young manabout a debt and a woman answered the phone, she'd ask for thecreditor by just his first name. "So many times it would be themother of the guy," Ms. Dunn says, "and just think it was a girlcalling. I'd say, 'Do you have his work number or his cell number?'and she'd give it to me," she says.

She also advises anyone who deals with college kids to not giveup on the slow payers. "It's not pay, not pay for years," she says."Then they are about to get married and need a loan. Suddenly,they'll pay to clear the debt." It also helps to remind nonpayersthat the unpaid debt shows up on their credit report, making itdifficult for them to obtain additional credit.

Entrepreneurs who take a laissez-faire attitude on collectionstend to have sad tales to share -- particularly solo operators,such as consultants. David Leopold of Cincinnati puts networkstogether for small business, making money by brokering thoserelationships. When a client was late paying him, he was stuck andstill had to pay his own vendors. "I had to borrow money at a veryhigh interest rate," he says. "That hurt." Another time he took aclient to court for nonpayment of $1,500, but because the clientwas "a friend," he had no written contract. The judge threw out hiscase. "To a small-business proprietor, that check is our paycheck,"he says.

Even with a contract, collections can require great stamina. Aclient owed Julie Phillippi, a Cincinnati marketing consultant,more than $3,000 for months. She could have turned it over to acollections agency or written it off, but the principle mattered toher. "I did good work for him," she says.

After months, she took her contract to small-claims court, andfollowing many delays, won a judgment against him. He ignored it.She put a lien on his house. She tried to garnish his wages. Shefinally took a step called a "personal body attachment," in which acouple of bailiffs were going to arrest him for contempt of court.At that point he paid, in cash. One bright spot amid the six monthsof aggravation: The lawyer representing her adversary was soimpressed by her resolve that he hired her for a marketingproject.

The nasty episode made her review how she handles collections.Now she invoices twice a month, rather than once. "It's a pain, butI get money in the door more often," she says. And she has begun totack on a 10% interest payment for bills more than 30 days late,which she highlights with a marker. That has speeded up payment,too.

Big corporate customers are a different sort of challenge, saysBrenda Cusick, a founder of ClickWare Inc., a Moorpark, Calif.,database company. She makes it a point to become chummy with theaccounts-payable clerks who work for her big clients, calling tocheck on an invoice, but always chatting about the clerk's childrenor recent vacation -- details that she meticulously tracks in herown database. Those relationships tend to speed an invoice througha big corporation's otherwise slow bureaucracy, and have helpedClickWare and its sister company grow to about $3 million inrevenue without outside investors, she says, even as the foundershave poured money into developing new software products.

Her rapport with the accounts clerks came in quite handyrecently. Ms. Cusick got word from a very big corporate client thatit was undergoing a financial audit. The auditor concluded that thebig corporation was indeed paying Ms. Cusick promptly -- but itwasn't taking a 2% discount to which it was entitled for earlypayment. Many companies offer such a discount, but typically theonus is on the customer to subtract the discount from the payment.For Ms. Cusick's client, the 2% over many months piled up to morethan $10,000. The company wanted it back from ClickWare.

Panicked, Ms. Cusick called the accounts-payable clerk at thebig company. "Don't do anything yet," the clerk advised. Soon Ms.Cusick got a second notice demanding reimbursement. "Sit tight,"the accounts-payable clerk told her, adding that other vendors gotthe notice and were resisting. Ms. Cusick did nothing, and nofurther correspondence arrived. "I made two friendly phone callsand saved thousands of dollars," she says.

Similarly, Ms. Dunn of M.A.D. Collections says her bestcollection "trick" is simply being nice and straightforward. Sherecognizes that many debtors have been beset by medical crises orother tragedies. In those cases, she'd often intercede on theirbehalf, making a case to settle the debt for a smaller lump sum,say, when an income-tax refund arrived. "Some people have actuallysent me thank-you letters for being so nice," she says, telling herthat they paid her before other creditors because she took the timeto listen to them. "I've saved those letters," she says

I'll rate posting for sec times just do last parts likecost and balance sheet ( account balance and cost incurred ) that'sit ready question carefully then answer all last partthanks

Charles Maxwell is starting a cheesecake bakery, Able BakerCharlie Company, to produce and sell different flavored cheesecakesto restaurants and the general public. He has just begun his studyof accounting, and is a bit confused about the many types ofreports he has read about and how they will help him run hisbusiness. He asks you to help him clarify what the differencesbetween managerial accounting and financial accounting are. Heâsalso wondering how to set up his inventory, how to classify thecosts of his business, and how to fill in some missinginformation.

	Required:
1.	Choose whether thecharacteristics on the Managerial vs. Financial panel are mostoften associated with managerial accounting or financialaccounting.
2.	Charles has provided some ofthe costs he expects to incur on the Cost Classification panel.Decide on the classifications that could be applied to each ofthese costs using the table provided. The cost object in each caseis the cheesecake.
3.	Charles found some sampleincome statements and balance sheets on the Internet, and askedwhich of them might be most appropriate for a manufacturingbusiness like his. Review income statements A and B on the IncomeStatements panel, and balance sheets C and D on the Balance Sheetspanel. Determine which income statement and balance sheet would bemost appropriate for a manufacturing business like Able BakerCharlie. Then, on the Financial Statements panel, denote whichincome statement and balance sheet would be most appropriate for amanufacturing business.
4.	At the end of February, afterthe second month of operations of Able Baker Charlie Company,Charles shows you the data heâs collected, but he was unable tofigure out some of the amounts. On the Costs and Balances panel,determine the missing amounts. Note: It may behelpful to use T accounts to map the flow of the amounts throughthe manufacturing accounts and solve for the missing dollarvalues.

Managerial vs. Financial

Choose whether the following characteristics are most oftenassociated with managerial accounting or financial accounting.

	Managerial Accounting	Financial Accounting
Primarily used for internal decision making
Generally Accepted Accounting Principles (GAAP) must beused
Prepared statements usually pertain to the company as a wholerather than individual departments or products
Information provided will often be subjective, such asestimated future results
Often prepared on an as-needed basis rather than at fixedintervals
Use principles of the Sustainability Accounting Standards Board(SASB) to provide sustainability information to external financialstatement users
Consideration of sustainability practices to contribute to thecompanyâs long-term success
Using eco-efficiency measures to reduce expenses

Cost Classification

Charles has provided some of the costs he expects to incur asfollows. Decide on the classifications that could be applied toeach of these costs using the table provided. The cost object ineach case is the cheesecake.

Cost	Product	Period	Direct	Direct	Factory	Selling	Administrative	Direct	Indirect	Prime	Conversion
Cost	Cost	Cost	Materials	Labor	Overhead	Expense	Expense	Cost	Cost	Cost	Cost
Eggs used to make cheesecakes
Bakerâs wages
Delivery driver wages
Depreciation of office computers
Power to run the cheesecake ovens
Presidentâs salary
Sales commissions
Factory supervisor salary

Financial Statements

Charles found some sample income statements and balance sheetson the Internet, and asked which of them might be most appropriatefor a manufacturing business like his. Review income statements Aand B on the Income Statements panel, and balance sheets C and D onthe Balance Sheets panel. Determine which income statement andbalance sheet would be most appropriate for a manufacturingbusiness like Able Baker Charlie Company.

Which income statement is most appropriate for a manufacturingbusiness?

Income statement A

Income statement B

Which balance sheet is most appropriate for a manufacturingbusiness?

Balance sheet C

Balance sheet D

Income Statements

Income Statement A (scroll down for Income StatementB):

Sample Company A

Income Statement

For the Year Ended December 31, 20Y8

1	Sales		$42,000.00
2	Beginning finished goods inventory	$5,250.00
3	Plus cost of goods manufactured	6,400.00
4	Cost of finished goods available for sale	$11,650.00
5	Less ending finished goods inventory	400.00
6	Cost of goods sold		11,250.00
7	Gross profit		$30,750.00
8	Operating expenses:
9	Selling expenses	$6,400.00
10	Administrative expenses	5,250.00
11	Total operating expenses		11,650.00
12	Net income		$19,100.00

Income Statement B:

Sample Company B

Income Statement

For the Year Ended December 31, 20Y8

1	Sales		$42,000.00
2	Beginning merchandise inventory	$5,250.00
3	Plus net purchases	6,400.00
4	Merchandise available for sale	$11,650.00
5	Less ending merchandise inventory	400.00
6	Cost of merchandise sold		11,250.00
7	Gross profit		$30,750.00
8	Operating expenses:
9	Selling expenses	$6,400.00
10	Administrative expenses	5,250.00
11	Total operating expenses		11,650.00
12	Net income		$19,100.00

Balance Sheets

Balance Sheet C (scroll down for Balance SheetD):

Sample Company C

Balance Sheet

December 31, 20Y8

1	Assets
2	Cash		$20,800.00
3	Accounts receivable (net)		10,000.00
4	Merchandise inventory		6,000.00
5	Supplies		2,100.00
6	Land		17,000.00
7	Total assets		$55,900.00
8	Liabilities
9	Accounts payable		$17,800.00
10	Stockholdersâ Equity
11	Common stock	$19,000.00
12	Retained earnings	19,100.00
13	Total stockholdersâ equity		38,100.00
14	Total liabilities and stockholdersâ equity		$55,900.00

Balance Sheet D:

Sample Company D

Balance Sheet

December 31, 20Y8

1	Assets
2	Cash		$20,800.00
3	Accounts receivable (net)		10,000.00
4	Inventories:
5	Finished goods	$2,000.00
6	Work in process	1,500.00
7	Materials	2,500.00	6,000.00
8	Supplies		2,100.00
9	Land		17,000.00
10	Total assets		$55,900.00
11	Liabilities
12	Accounts payable		$17,800.00
13	Stockholdersâ Equity
14	Common stock	$19,000.00
15	Retained earnings	19,100.00
16	Total stockholdersâ equity		38,100.00
17	Total liabilities and stockholdersâ equity		$55,900.00

Costs and Balances

At the end of February, after the second month of operationsof Able Baker Charlie Company, Charles shows you the data heâscollected, but he was unable to figure out some of the amounts.Review the following data and fill in the missing amounts on thechart for Able Baker Charlie Company. Note: It maybe helpful to use T accounts to map the flow of the amounts throughthe manufacturing accounts and solve for the missing dollar values.It may also be helpful to review the steps for determining the costof materials used, total manufacturing cost incurred, and cost ofgoods manufactured.

Data forFebruary
Decrease in materialsinventory	$3,300
Materials inventory on Feb. 28	50% of materials inventory on Jan.31
Direct materials purchased	$12,600
Direct materials used	3 times the direct laborincurred
Total manufacturing costs incurredin period	$29,400
Total manufacturing costs incurredin period	70% of Cost of GoodsManufactured
Total manufacturing costs incurredin period	$7,000 less than Cost of GoodsSold

Account	Account Balances		Costs Incurred
Account	Jan.31	Feb.28	Costs Incurred
Materials Inventory			DirectMaterials Used
Work inProcess Inventory	$27,000		DirectLabor Incurred
FinishedGoods Inventory		$16,000	FactoryOverhead Incurred
			Cost ofGoods Sold

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