Aba Putangina Nyo

BUSINESS CASE Presented to the Accountancy Department De La Salle University In partial fulfillment Of the course requirements In ACTPACO (K32) Duhaylungsod, Paul Angelo, P. skirt 5, 2013 DECISION MAKING ACROSS THE ORGANIZATION Richard Powers and Jane Keckley, two professionals in the pay bea, have worked for Eberhart Leasing for a number of years. Eberhart Leasing is a go with that leases high-tech checkup equipment to hospitals. Richard and Jane have decided that, with their financial expertise, they might start their own confederacy to provide consulting services to individuals interested in leasing equipment.One form of organization they ar considering is a partnership. If they start a partnership, each individual plans to contribute P2 unrivaled jillion million in cash. In addition, Richard has a used IBM computer that originally equal P148,000, which he intends to invest in the partnership. The computer has a present market place place value of P60,000. Although bo th Richard and Jane are financial wizards, they do not cognize a great deal ab fall bulge how a partnership operates. As a result, they have come to you for advice. 1.What are the major disadvantages of starting a partnership? Partnership contribute easily dissolve automatically when hotshot of its partners no longer wishes to participate in the line of reasoning, or is unable to. This whitethorn happen in the event of death, bankruptcy, retirement or resignation. A split up could also force a partner to attempt to cash out his interest, since decisions are deal outd, dis conformitys grass occur. A partnership is for the long term, and expectations and situations can change, which can lead to dramatic and traumatic split ups.Business partners are jointly and each liable for the actions of the new(prenominal)wise partners and you have to consult your partner and negotiate much than as you cannot make decisions by yourself therefore need to be much flexible and a major disadvantage of a partnership is interminable liability. General partners are liable without terminus ad quem for all debts contracted and errors make by the partnership. The accounts of partnership concerns are not published so unrestricted is unaware of the exact position of the cable. there is a suspicion in humans mind that these concerns earn huge profits at the exist of consumers. thither is no legal binding for the prevalentation of accounts. So partnership concerns neediness prevalent confidence. No partner can transfer his treat to a third party without the consent of the other partners. If a partner wants his share back it bequeath not be possible without the approval of other partners or without dissolution of the firm. In case of a company, any shareowner can transfer his shares without affecting the working of the demarcation.In partnership, a partner is for good wedded to it and at long last there is a doation in ski lift excess resources for expansion p urposes. The business organization resources are limited to the personal silver of the partners. Borrowing capacity of the partners is also limited. The number of partners to be added to a business is also limited. A banking company cannot have more than ten partners and in other businesses the number of partners cannot exceed twenty. So there is a limit beyond which partners cannot be added. 2. What type of put down is needed for a partnership, and what should this instrument block off?Article of co partnership is a written symmetricalness prior to the formation of a business, outlining the terms of the partnership and it must require the firms name, how the firm will begin and end, nature of the business ope dimensionns, mo gainary agreements like partners enthronisations, determination of partner salaries and distribution of profits and rednesses. The entry must also contain decision making guidelines and authority of partners and lastly expected quantify contribution of partners. 3. Both Richard and Jane plan to work regular in the new partnership.They believe that electronic network income or net press release should be shared equally. However, they are wondering how they can provide recompense to Richard Powers for his supernumerary investiture of the computer. What would you tell them? They should change the profit and loss ratio in favor or Richard Powers in order for them to compensate his additional investment or they can also give him a indemnity as well because if they distribute the net loss or net income equally it would be unfair for him because he invested more than the other partner.Another advice I would tell them is Richard can contribute less cash and compensate with the investment of his computer therefore, the basis of the distribution of income is their beginning capital or sign investment. 4. Richard is not sure how the computer equipment should be reported on his revenue return. What would you tell him? The report o n his task return regarding the computer equipment will be based or I related on his income or you can say that depending on their net income or loss dividing by the partners profit 5.As indicated above, Richard and Jane have worked together for a number of years. Richards skills equilibrate Janes and vice versa. If one of them dies, it will be very severe for the other to maintain the business, not to mention the backbreakingy of pay the departed partners estate for his or her partnership interest. What would you advise them to do? They should grapple the risk of entering a partnership and all of its disadvantages state earlier but because accidents cannot be prevented they should have alternatives or options unless one of them dies primaevalish during the partnership.One option is that they could shell out their respective heirs to take over the business for them or if they dont have a child they must say their personal choice of who they want to replace them but of cou rse the heirs or assignees must have knowledge about what they might acquire in their shoulders like the liabilities of the previous owner, the responsibilities on handling a business. In nonrecreational the decedent partners estate they could build a hope fund through their partnership that would sustain the payables if ever one of them dies so that the remaining partner would not have a difficult period in paying those interest.Aba Putangina NyoBUSINESS CASE Presented to the Accountancy Department De La Salle University In partial fulfillment Of the course requirements In ACTPACO (K32) Duhaylungsod, Paul Angelo, P. marching music 5, 2013 DECISION MAKING ACROSS THE ORGANIZATION Richard Powers and Jane Keckley, two professionals in the finance area, have worked for Eberhart Leasing for a number of years. Eberhart Leasing is a company that leases high-tech health check equipment to hospitals. Richard and Jane have decided that, with their financial expertise, they might start t heir own company to provide consulting services to individuals interested in leasing equipment.One form of organization they are considering is a partnership. If they start a partnership, each individual plans to contribute P2 million in cash. In addition, Richard has a used IBM computer that originally cost P148,000, which he intends to invest in the partnership. The computer has a present market value of P60,000. Although both Richard and Jane are financial wizards, they do not know a great deal about how a partnership operates. As a result, they have come to you for advice. 1.What are the major disadvantages of starting a partnership? Partnership can easily dissolve automatically when one of its partners no longer wishes to participate in the business, or is unable to. This whitethorn happen in the event of death, bankruptcy, retirement or resignation. A disarticulate could also force a partner to attempt to cash out his interest, since decisions are shared, disagreements can oc cur. A partnership is for the long term, and expectations and situations can change, which can lead to dramatic and traumatic split ups.Business partners are jointly and distributively liable for the actions of the other partners and you have to consult your partner and negotiate more as you cannot make decisions by yourself therefore need to be more flexible and a major disadvantage of a partnership is unfathomable liability. General partners are liable without limit for all debts contracted and errors make by the partnership. The accounts of partnership concerns are not published so public is unaware of the exact position of the business.There is a suspicion in public mind that these concerns earn huge profits at the cost of consumers. There is no legal binding for the publication of accounts. So partnership concerns escape public confidence. No partner can transfer his share to a third party without the consent of the other partners. If a partner wants his share back it will n ot be possible without the approval of other partners or without dissolution of the firm. In case of a company, any stockholder can transfer his shares without affecting the working of the business.In partnership, a partner is permanently wedded to it and lastly there is a limitation in altitude additional resources for expansion purposes. The business resources are limited to the personal notes of the partners. Borrowing capacity of the partners is also limited. The number of partners to be added to a business is also limited. A banking company cannot have more than ten partners and in other businesses the number of partners cannot exceed twenty. So there is a limit beyond which partners cannot be added. 2. What type of history is needed for a partnership, and what should this document contain?Article of co partnership is a written agreement prior to the formation of a business, outlining the terms of the partnership and it must contain the firms name, how the firm will begin an d end, nature of the business operations, monetary agreements like partners investments, determination of partner salaries and distribution of profits and losses. The document must also contain decision making guidelines and authority of partners and lastly expected time contribution of partners. 3. Both Richard and Jane plan to work regular in the new partnership.They believe that net income or net loss should be shared equally. However, they are wondering how they can provide salary to Richard Powers for his additional investment of the computer. What would you tell them? They should change the profit and loss ratio in favor or Richard Powers in order for them to compensate his additional investment or they can also give him a subsidy as well because if they distribute the net loss or net income equally it would be unfair for him because he invested more than the other partner.Another advice I would tell them is Richard can contribute less cash and compensate with the investmen t of his computer therefore, the basis of the distribution of income is their beginning capital or sign investment. 4. Richard is not sure how the computer equipment should be reported on his tax return. What would you tell him? The report on his tax return regarding the computer equipment will be based or I related on his income or you can say that depending on their net income or loss dividing by the partners profit 5.As indicated above, Richard and Jane have worked together for a number of years. Richards skills equilibrate Janes and vice versa. If one of them dies, it will be very difficult for the other to maintain the business, not to mention the difficulty of paying the deceased partners estate for his or her partnership interest. What would you advise them to do? They should know the risk of entering a partnership and all of its disadvantages express earlier but because accidents cannot be prevented they should have alternatives or options unless one of them dies early du ring the partnership.One option is that they could assign their respective heirs to take over the business for them or if they dont have a child they must assign their personal choice of who they want to replace them but of course the heirs or assignees must have knowledge about what they might acquire in their shoulders like the liabilities of the previous owner, the responsibilities on handling a business. In paying the deceased partners estate they could build a self-confidence fund through their partnership that would sustain the payables if ever one of them dies so that the remaining partner would not have a difficult time in paying those interest.