Warr22e_IM_TM_Ch12 - Transparency Master 12-1...

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Transparency Master 12-1 CHARACTERISTICS OF A PARTNERSHIP 1. Limited life 2. Unlimited liability 3. Co-ownership of partnership property 4. Mutual agency 5. Participation in income 6. Non-taxable entity 7. Created by contract (partnership agreement or articles of partnership)
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Transparency Master 12-2 Limited Liability Corporation Characteristics similar to partnerships: 1. Multiple owners, called “members” 2. Members create an operating agreement 3. May elect for income to pass through to members’ individual tax returns 4. Usually have a limited life 5. Mutual agency if member managed Characteristics similar to corporations: 1. Limited liability 2. Must file articles of organization with state government authorities 3. If manager managed, only authorized members may legally bind the company
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Transparency Master 12-3 EQUITY REPORTING Business form Report Proprietorship Statement of Owner’s Capital Corporation Statement of Stockholders’ Equity Partnership Statement of Partnership Capital Limited Liability Statement of Corporation Members’ Equity
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Transparency Master 12-4 REPORTING CHANGES IN OWNERS’ CAPITAL Capital, beginning of the year + Investments (also called “Capital Additions”) + Net Income (or – Net Loss) - Withdrawals Capital, end of the year
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Transparency Master 12-5 STATEMENT OF STOCKHOLDERS' EQUITY—TELDAR CORPORATION The January 1, 2004 balances of Teldar Corporation's equity accounts are listed below: Preferred Stock. ................................... $300,000 Common Stock. ................................... $800,000 Paid-In Capital—Common Stock. ....... $ 50,000 Retained Earnings. .............................. $240,000 During 2004, the following transactions affected Teldar's equity accounts: 1. 1,000 shares of $10 par value common stock were sold for $12 per share. 2. 500 shares of common stock were repurchased to
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Warr22e_IM_TM_Ch12 - Transparency Master 12-1...

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