ACC 630 Milestone One Guidelines and Ruic For the final project in this course, you will imagine...

Question

ACC 630 Milestone One Guidelines and Ruic   For the final project in this course, you will imagine you are a new CPA in an accounting firm. You have been asked to prepare a report on the differences in accounting practices for partnerships versus corporations in different scenarios, such as a major lawsuit, consolidation, estate planning, and use of a trust. You are to use a particular large corporation as your comparative example. Choose one of the following: Walmart, Kroger, Amazon, Costco, The Home Depot, CVS Health Corporation, or Target. You don’t have to choose a particular partnership for comparison.  This is the first of three milestone assignments that will lead to completion of your course project. In this assignment, you will complete Section I of the final project. Prepare a Word document that addresses the critical elements below in relation to your chosen corporation. Answer each question in a substantive way, and defend each of your responses with at least one scholarly source other than your textbook. Pay close attention to the grading ruic to make sure you meet the “Proficient” level in each requirement.  Specifically, the following critical elements must be addressed:   I. Business Entities—Partnerships and Corporations Assume your company is involved in a major lawsuit and the probable damages are estimated to be $2,000,000. A. Describe the effects damage estimates would have on the financial statements of a corporation and a partnership. Support your answer. B. How do disclosure requirements differ from a corporation to a partnership, and what information is required? Support your answer. C. Are the shareholders at risk for any personal liability with the company set up as a corporation? Defend your response and support your answer. D. If your company was set up as a partnership, would the partners be at risk for personal liability? Defend your response and support your answer.  Guidelines for Submission: Your paper must be submitted as a 2- to 3-page Word document (excluding the title and reference pages). Use double spacing, 12-point Times New Roman font, and one-inch margins. For references, you should use at least one outside source other than the textbook. Sources should be cited using the latest APA style guidelines.    Ruic  Critical Elements Proficient (100%) Needs Improvement (70%) Not Evident (0%) Value Business Entities: Damages Estimate Describes the effects the damages estimate would have on the statements based on the company eing set up as a corporation Describes the effects the damages estimate would have on the statements, but does not base this on the company being a corporation Does not describe the effects the damages estimate would have on the statements 22.5 Business Entities: Disclosure Requirements Identifies how disclosure requirements differ from a corporation to a partnership, and identifies what information is required Identifies how disclosure requirements differ from a corporation to a partnership, but does not identify what information is required Does not identify how disclosure equirements differ from a corporation to a partnership 22.5Critical Elements Proficient (100%) Needs Improvement (70%) Not Evident (0%) Value Business Entities: Personal Liability Determines whether the shareholders are at risk for any personal liability and defends response Determines whether the shareholders are at risk for any personal liability, but does not defend response or defense is weak or cursory Does not determine whether the shareholders are at risk for any personal liability 22.5 Business Entities: Partnership Determines whether the partners would be at risk for personal liability and defends response Determines whether the partners would be at risk for personal liability, ut does not defend response or defense is weak or cursory Does not determine whether the partners would be at risk for personal liability 22.5 Articulation of Response Submission has no major eors related to citations, grammar, spelling, syntax, or organization Submission has major eors related to citations, grammar, spelling, syntax, or organization that negatively impact eadability and articulation of main ideas Submission has critical eors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas 10 Total 100%

Khushboo · Accepted Answer

A. Effect of estimate of damage on the financial statement of corporation and partnership:
As per FASB guiding principle, the liabilities which are contingent in nature can be recognized in the accounting records only when there is probability of the contingency and the amount of liability can be estimated.  Further when the corporation is included in the major litigations then any estimated loss which results from the litigation can be identified as the liability of contingent in nature. In the given case the corporation is indulged in the pending litigation and the possible damage is twenty lakhs and it meets all the requirements of the contingent liabilities then the possible loss will be identified in the financial records. Further when the legal team of the entity gets estimate then it will get debited to legal expenses for $2,000,000 and accrued liability will get credited.  Similarly, when the lawsuit gets settled then the company will knock off the outstanding balance of accrued liability and cash account respectively.  The treatment of contingent liability is same in both partnership firm and the corporation according to generally accepted accounting principles. However, in partnership firm all the partners are liable, and every partner will be severally accounted for the damage while on the other hand corporation is separate legal entity and the legal liability of the damage is on the company (Masters, Terry).
B. Disclosure requirement in corporation vs. partnership firm:

ACC 630 Milestone One Guidelines and Rubric For the final project in this course, you will imagine you are a new CPA in an accounting firm. You have been asked to prepare a report on the differences...

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment