A memo explaining the advantages and disadvantages of partnerships versus corporation.

Question

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Answer 1

Question

Chapter 12, Problem 12.1CP

(a)

Partnership: The form of business entity which is formed by an agreement, owned and managed mutually by two or more individuals, who invest their assets in the business and share the liabilities and profits among themselves is referred to as partnership.

Corporation: The form of business entity ,which is incorporated by state law into a separate legal entity, owned by stockholders, and managed by board of directors elected by stockholders, is referred to as corporation.

To determine

To prepare: A memo explaining the advantages and disadvantages of partnerships versus corporation.

(b)

To determine

To discuss: The consequences of equity financing versus debt financing.

(c)

To determine

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The transactions in the books of LP Fitness and indicates the number of shares issued and number of shares outstanding.

(d)

To determine

To journalize: The transactions in the books of LP Fitness

(e)(1)

To determine

Equity method: Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in the outstanding stock of the investee company.

To journalize: The transactions in the books of LP Fitness

(2)

To determine

To post: The entries to stock investment account and determine the balance at the end of 2016.

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Answer 2

Question

Chapter 12, Problem 12.1CP

(a)

Partnership: The form of business entity which is formed by an agreement, owned and managed mutually by two or more individuals, who invest their assets in the business and share the liabilities and profits among themselves is referred to as partnership.

Corporation: The form of business entity ,which is incorporated by state law into a separate legal entity, owned by stockholders, and managed by board of directors elected by stockholders, is referred to as corporation.

To determine

To prepare: A memo explaining the advantages and disadvantages of partnerships versus corporation.

(b)

To determine

To discuss: The consequences of equity financing versus debt financing.

(c)

To determine

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The transactions in the books of LP Fitness and indicates the number of shares issued and number of shares outstanding.

(d)

To determine

To journalize: The transactions in the books of LP Fitness

(e)(1)

To determine

Equity method: Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in the outstanding stock of the investee company.

To journalize: The transactions in the books of LP Fitness

(2)

To determine

To post: The entries to stock investment account and determine the balance at the end of 2016.

Expert Solution & Answer

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Answer 3

Question

Chapter 12, Problem 12.1CP

(a)

Partnership: The form of business entity which is formed by an agreement, owned and managed mutually by two or more individuals, who invest their assets in the business and share the liabilities and profits among themselves is referred to as partnership.

Corporation: The form of business entity ,which is incorporated by state law into a separate legal entity, owned by stockholders, and managed by board of directors elected by stockholders, is referred to as corporation.

To determine

To prepare: A memo explaining the advantages and disadvantages of partnerships versus corporation.

(b)

To determine

To discuss: The consequences of equity financing versus debt financing.

(c)

To determine

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The transactions in the books of LP Fitness and indicates the number of shares issued and number of shares outstanding.

(d)

To determine

To journalize: The transactions in the books of LP Fitness

(e)(1)

To determine

Equity method: Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in the outstanding stock of the investee company.

To journalize: The transactions in the books of LP Fitness

(2)

To determine

To post: The entries to stock investment account and determine the balance at the end of 2016.

Expert Solution & Answer

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Answer 4

Question

Chapter 12, Problem 12.1CP

(a)

Partnership: The form of business entity which is formed by an agreement, owned and managed mutually by two or more individuals, who invest their assets in the business and share the liabilities and profits among themselves is referred to as partnership.

Corporation: The form of business entity ,which is incorporated by state law into a separate legal entity, owned by stockholders, and managed by board of directors elected by stockholders, is referred to as corporation.

To determine

To prepare: A memo explaining the advantages and disadvantages of partnerships versus corporation.

(b)

To determine

To discuss: The consequences of equity financing versus debt financing.

(c)

To determine

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The transactions in the books of LP Fitness and indicates the number of shares issued and number of shares outstanding.

(d)

To determine

To journalize: The transactions in the books of LP Fitness

(e)(1)

To determine

Equity method: Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in the outstanding stock of the investee company.

To journalize: The transactions in the books of LP Fitness

(2)

To determine

To post: The entries to stock investment account and determine the balance at the end of 2016.

Expert Solution & Answer

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Answer 5

Chapter 12, Problem 12.1CP

(a)

Partnership: The form of business entity which is formed by an agreement, owned and managed mutually by two or more individuals, who invest their assets in the business and share the liabilities and profits among themselves is referred to as partnership.

Corporation: The form of business entity ,which is incorporated by state law into a separate legal entity, owned by stockholders, and managed by board of directors elected by stockholders, is referred to as corporation.

To determine

To prepare: A memo explaining the advantages and disadvantages of partnerships versus corporation.

(b)

To determine

To discuss: The consequences of equity financing versus debt financing.

(c)

To determine

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The transactions in the books of LP Fitness and indicates the number of shares issued and number of shares outstanding.

(d)

To determine

To journalize: The transactions in the books of LP Fitness

(e)(1)

To determine

Equity method: Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in the outstanding stock of the investee company.

To journalize: The transactions in the books of LP Fitness

(2)

To determine

To post: The entries to stock investment account and determine the balance at the end of 2016.

Answer 6

Chapter 12, Problem 12.1CP

(a)

Partnership: The form of business entity which is formed by an agreement, owned and managed mutually by two or more individuals, who invest their assets in the business and share the liabilities and profits among themselves is referred to as partnership.

Corporation: The form of business entity ,which is incorporated by state law into a separate legal entity, owned by stockholders, and managed by board of directors elected by stockholders, is referred to as corporation.

To determine

To prepare: A memo explaining the advantages and disadvantages of partnerships versus corporation.

Answer 7

Chapter 12, Problem 12.1CP

(a)

Partnership: The form of business entity which is formed by an agreement, owned and managed mutually by two or more individuals, who invest their assets in the business and share the liabilities and profits among themselves is referred to as partnership.

Corporation: The form of business entity ,which is incorporated by state law into a separate legal entity, owned by stockholders, and managed by board of directors elected by stockholders, is referred to as corporation.

To determine

To prepare: A memo explaining the advantages and disadvantages of partnerships versus corporation.

Answer 8

(b)

To determine

To discuss: The consequences of equity financing versus debt financing.

Answer 9

(b)

To determine

To discuss: The consequences of equity financing versus debt financing.

Answer 10

(c)

To determine

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The transactions in the books of LP Fitness and indicates the number of shares issued and number of shares outstanding.

Answer 11

(c)

To determine

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The transactions in the books of LP Fitness and indicates the number of shares issued and number of shares outstanding.

Answer 12

(d)

To determine

To journalize: The transactions in the books of LP Fitness

Answer 13

(d)

To determine

To journalize: The transactions in the books of LP Fitness

Answer 14

(e)(1)

To determine

Equity method: Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in the outstanding stock of the investee company.

To journalize: The transactions in the books of LP Fitness

Answer 15

(e)(1)

To determine

Equity method: Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in the outstanding stock of the investee company.

To journalize: The transactions in the books of LP Fitness

Answer 16

(2)

To determine

To post: The entries to stock investment account and determine the balance at the end of 2016.

Answer 17

(2)

To determine

To post: The entries to stock investment account and determine the balance at the end of 2016.

Answer 18

Expert Solution & Answer

Answer 19

Expert Solution & Answer

Answer 20

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Answer 21

Ch. 12 - Prob. 1Q Ch. 12 - Prob. 2Q Ch. 12 - Prob. 3Q Ch. 12 - Prob. 4Q Ch. 12 - 5 What is the cost of an investment in stock? Ch. 12 - Prob. 6Q Ch. 12 - Prob. 7Q Ch. 12 - Prob. 8Q Ch. 12 - Prob. 9Q Ch. 12 - Prob. 10Q

A memo explaining the advantages and disadvantages of partnerships versus corporation.

To prepare: A memo explaining the advantages and disadvantages of partnerships versus corporation.

To discuss: The consequences of equity financing versus debt financing.

To journalize: The transactions in the books of LP Fitness

Equity method: Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in the outstanding stock of the investee company. To journalize: The transactions in the books of LP Fitness

To post: The entries to stock investment account and determine the balance at the end of 2016.

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Chapter 12 Solutions

Equity method: Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in the outstanding stock of the investee company.

To journalize: The transactions in the books of LP Fitness