ACC 100 Chapter Notes - Chapter 1: Retained Earnings, Current Liability, Financial Statement

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18 Apr 2012
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Chapter 1 Homework
Submitted by Group 2
P1-1A
1. Corporation - The three professors each contributed equal amounts of
cash and knowledge into the business. It also says that their software
looks promising, and they are concerned about the legal liabilities that
the business might confront. If they form a corporation, the professors
will not be personally liable for any business debts and will not have to
pay personal income taxes on business earnings.
2. Proprietorship – Because Joseph opened and operates the business on
his own and is not sharing anything with anyone.
3. Partnership – This business currently has two owners. Robert and Tom
have combined their own businesses to form a larger one. Because they
are looking to expand their business, they will need to participate in
financing activities. They may decide to maintain their partnership and
borrow money from a bank or other creditor. They may also decide to
sell shares in their company which would transform it into a corporation.
4. Partnership This business will be owned by three people. The
marketing consulting business is a service that can be organized within
this type of business organization.
5. Proprietorship – Herve wants to maintain control over his business, so
a proprietorship is the best choice. However, due to his lack of funds, he
would benefit from forming a partnership with someone who can
contribute more economic resources to purchasing assets for the
business.
P1-6A
One Planet Cosmetics Corp.
Statement of Earnings
Month Ended June 30, 2006
Revenues
Service Revenue
$8,000
Expenses
Supplies expense $1,200
Gas and oil expense 900
Advertising expense 500
Utilities expense 300
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