CengageNOWv2, 1 term Printed Access Card for Warren's Survey of Accounting, 8th
8th Edition
ISBN: 9781305961982
Author: Carl Warren
Publisher: Cengage Learning
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Textbook Question
Chapter 2, Problem 2.1.2C
Business emphasis
Assume that you are considering developing a nationwide chain of women’s clothing stores. You have contacted a Seattle-based firm that specializes in financing new business ventures and enterprises. Such firms, called venture capital firms, finance new businesses in exchange for a percentage of the ownership.
For each emphasis you listed in (1), provide an example of a real-world business using the same emphasis.
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Scenario:
Karen and Yanique are opening a jewellery store with no competition in the area from which they intend to operate their business. Their fundamental decision is how to organize the business. They anticipate super profits the first year, with the ability to sell franchises in the future. Although they have enough to start the business now as a partnership, cash flow will be an issue as they grow and as such, they feel the corporate form of operation will be best for the long term. They seek your advice.Requirements:1. State three (3) of the main advantage they gain by selecting a corporate form of business now.2. Would you recommend they initially issue preferred or common stock? Why?3. If the corporation when formed sets a par value for its shares low and issue common stock for a price above par, what is this amount above par called? Can this amount be treated as a gain, income, or profit for the corporation? Please give the reason for your answer.
4. Assume one year later…
Scenario:
Karen and Yanique are opening a jewellery store with no competition in the area from which they intend to operate their business. Their fundamental decision is how to organize the business. They anticipate super profits the first year, with the ability to sell franchises in the future. Although they have enough to start the business now as a partnership, cash flow will be an issue as they grow and as such, they feel the corporate form of operation will be best for the long term. They seek your advice.
Requirements:
1. Assume one year later (2019) the company KY Jeweller’s Ltd has been formed and the owners are desirous of companying several financial transactions and possible outcomes to assist in guiding their decision-making process. They have asked each student from your accounting course to prepare the company’s journal entries and statement of owner’s equity based on the following information which is grouped according to your fist name initial. (Hint!!!! Example fist…
Scenario:
Steve Osbourne is considering opening a business, but the major decision faced is how to organize the business. Steve anticipates generating a massive profit during the first year and that the following years should be relatively profitable. Although he has enough to start the business now as a partnership, he believes cash flow may be an issue as the company grows. Steve believes that the corporate form of operation will be his best option and have hired you as a consultant and seek your advice.
Requirements:
Answer the following questions for Steve.
Explain the corporate characteristic termed “no mutual agency”
Explain the corporate characteristic termed limited liability.
Explain the term outstanding stock.
Chapter 2 Solutions
CengageNOWv2, 1 term Printed Access Card for Warren's Survey of Accounting, 8th
Ch. 2 - The purchase of land for $50,000 cash was...Ch. 2 - The receipt of $8,000 cash for fees earned was...Ch. 2 - If total assets increased $20,000 during a period...Ch. 2 - Prob. 4SEQCh. 2 - Which of the following transactions changes only...Ch. 2 - Prob. 1CDQCh. 2 - Prob. 2CDQCh. 2 - Indicate whether the following error would cause...Ch. 2 - Prob. 4CDQCh. 2 - Prob. 5CDQ
Ch. 2 - Capstone Consulting Services acquired land 5 years...Ch. 2 - Prob. 7CDQCh. 2 - Assume that Esquire Consulting erroneously...Ch. 2 - Prob. 9CDQCh. 2 - Assume that as of January 1, 20Y8, Sylvester Con-...Ch. 2 - Using the January 1 and December 31, 20Y8, data...Ch. 2 - Accounting equation Determine the missing amount...Ch. 2 - Accounting equation The Walt Disney Company (DIS)...Ch. 2 - Accounting equation Campbell Soup Co. (CPB) had...Ch. 2 - Accounting equation The following are recent year...Ch. 2 - Prob. 2.5ECh. 2 - Effects of transactions on stockholders’ equity...Ch. 2 - Effects of transactions on Accounting equation...Ch. 2 - Effects of transactions on Accounting equation A...Ch. 2 - Effects of transactions on stockholders’ equity...Ch. 2 - Effects of transactions on Accounting equation On...Ch. 2 - Nature of transactions Cheryl Alder operates her...Ch. 2 - Net income and dividends The income statement of a...Ch. 2 - Net income and stockholders’ equity for four...Ch. 2 - Prob. 2.14ECh. 2 - Prob. 2.15ECh. 2 - Balance sheet, net income, and cash flows...Ch. 2 - Income statement After its first month of...Ch. 2 - Statement of stockholders’ equity Using the...Ch. 2 - Prob. 2.19ECh. 2 - Statement of cash flows Using the financial data...Ch. 2 - Effects of transactions on Accounting equation...Ch. 2 - Prob. 2.22ECh. 2 - Transactions and Financial statements Les Stanley...Ch. 2 - Transactions and Financial statements Les Stanley...Ch. 2 - Transactions and Financial statements Les Stanley...Ch. 2 - Transactions and Financial statements Les Stanley...Ch. 2 - Transactions and Financial statements Les Stanley...Ch. 2 - Transactions and Financial statements James...Ch. 2 - Transactions and Financial statements James...Ch. 2 - Transactions and Financial statements James...Ch. 2 - Transactions and Financial statements James...Ch. 2 - P2-3 Financial statements The following amounts...Ch. 2 - Financial statements Padget Home Services began...Ch. 2 - Financial statements Padget Home Services began...Ch. 2 - Financial statements Padget Home Services began...Ch. 2 - Financial statements Padget Home Services began...Ch. 2 - Missing amounts from Financial statements The...Ch. 2 - Financial statements Alpine Realty. Inc.,...Ch. 2 - Prob. 2.1MBACh. 2 - Prob. 2.2MBACh. 2 - MBA 2-3 Common-sized income statements Delta Air...Ch. 2 - MBA 2-4 Common-sized income statements Southwest...Ch. 2 - Prob. 2.5MBACh. 2 - MBA 2-6 Common-sized income statements Kellogg...Ch. 2 - MBA 2-7 Common-sized income statements General...Ch. 2 - Common-sized income statements Using your answers...Ch. 2 - Prob. 2.9.1MBACh. 2 - Prob. 2.9.2MBACh. 2 - Business emphasis Assume that you are considering...Ch. 2 - Business emphasis Assume that you are considering...Ch. 2 - Business emphasis Assume that you are considering...Ch. 2 - Prob. 2.2CCh. 2 - Prob. 2.3CCh. 2 - Prob. 2.4.1CCh. 2 - Prob. 2.4.2CCh. 2 - Financial information Yahoo.com’s (YHOO) finance...Ch. 2 - Prob. 2.4.4CCh. 2 - Prob. 2.4.6CCh. 2 - Prob. 2.4.7CCh. 2 - Prob. 2.4.8CCh. 2 - Prob. 2.4.9CCh. 2 - Financial information Yahoo.com’s (YHOO) finance...
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