Warren_23e__AISE_IM_Ch12 - chapter 12 Accounting for...

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chapter 12 Accounting for Partnerships and Limited Liability Companies ______________________________________________ OPENING COMMENTS This chapter compares and contrasts proprietorships, partnerships, and limited liability companies. After reviewing the characteristics and equity reporting of these business forms, the chapter focuses on partnerships and limited liability companies. The topics covered include partnership formation, dissolution, and liquidation. The chapter also discusses arrangements for distributing partnership income and loss. After studying the chapter, your students should be able to: 1. Describe the basic characteristics of proprietorships, partnerships, and limited liability companies. 2. Describe and illustrate the accounting for forming a partnership and for dividing the net income and net loss of a partnership. 3. Describe and illustrate the accounting for partner admission and withdrawal. 4. Describe and illustrate the accounting for liquidating a partnership. 5. Prepare the statement of partnership equity. STUDENT FAQS What is the best business form to use when setting up a business? Do all partners have to agree to accept a new partner into the company? How many people does it take to set up an LLC at the beginning? 189 This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold, copied, or distributed without the prior consent of the publisher
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190 Chapter 12 Accounting for Partnerships and Limited Liability Companies This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold, copied, or distributed without the prior consent of the publisher. Can one person set up an LLC? Can LLC owners take money out of a business as they desire? Why do we have bonuses paid to existing partners or paid to a new partner when a new partner is admitted to the partnership? Why doesn’t the new partner just pay for his or her share of the partnership based on what it is worth? What is the difference or advantage of an LLC versus a partnership? How could a partner’s capital account end up with a debit (or deficit) balance? IN-CLASS AND HOMEWORK ASSIGNMENT CHART Number Objective Description Difficulty Time AACSB AICPA SS GL EO12-1 12-1 Easy 5 min Analytic FN-Measurement EO12-2 12-1 Easy 5 min Analytic FN-Measurement EO12-3 12-1 Easy 5 min Analytic FN-Measurement EO12-4 12-1 Easy 5 min Analytic FN-Measurement EO12-5 12-1 Easy 5 min Analytic FN-Measurement EO12-6 12-2 Easy 5 min Analytic FN-Measurement EO12-7 12-3 Easy 5 min Analytic FN-Measurement EO12-8 12-3 Easy 5 min Analytic FN-Measurement EO12-9 12-3 Easy 5 min Analytic FN-Measurement EO12-10 12-3 Easy 5 min Analytic FN-Measurement EO12-11 12-3 Easy 5 min Analytic FN-Measurement EO12-12 12-3 Easy 5 min Analytic FN-Measurement EO12-13 12-3 Easy 5 min Analytic FN-Measurement EO12-14 12-4 Easy 5 min
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Warren_23e__AISE_IM_Ch12 - chapter 12 Accounting for...

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