Five independent situations follow:

1. Three computer science professors have formed a business to expand wireless access for computers. Each has contributed an equal amount of cash and knowledge to the venture. While their plans look promising, they are concerned about the legal liabilities that their business might confront.

2. Joseph LeBlanc, a student looking for summer work, has opened a bicycle rental shop in a small shed on the Trans Canada Trail system.

3. Robert Steven and Tom Cheng each owned a snowboard manufacturing business and have now decided to combine their businesses. They expect that in the coming year they will need to raise funds to expand their operations.

4. Darcy Becker, Ellen Sweet, and Meg Dwyer recently graduated with business degrees, with majors in accounting. Friends since childhood, they have decided to start an accounting practice.

5. Hervé Gaudet wants to rent storage lockers in airports across the country. His idea is that customers will be able to leave their luggage at the airport if they have a long layover so they can explore the local surroundings without being burdened with luggage. This will require the rental of space in each airport as well as the hiring of employees and other operating costs.

Instructions

(a) In each of the above situations, explain what form of organization the business is likely to take: proprietorship, partnership, public corporation, or private corporation. Give reasons for your choice.

(b) Indicate which type of accounting standards-IFRS or ASPE-each of the business organizations you identified in (a) is most likely to use for external reporting purposes.