A client of yours is considering going into a partnership with a business associate. The partnership would own a retail gourmet ice cream shop. Your client anticipates investing $150,000 and working ten hours a week. His business associate will invest $50,000 and work forty hours a week. Your client has requested your informed perspective on a number of items before he commits to the business partnership. Requirements Your client has requested the following be included in a report (46 pages) that he can study while considering how to approach this business opportunity:

Your client does not think that splitting the partnership income 50-50 will be fair to either partner. He has asked you to recommend clauses in the partnership agreement that stipulate partnership income and loss allocations. The company's flagship location would be in Buffalo, New York, but the potential partners have already discussed opening additional locations in Toronto, Canada. The client knows that as a partnership they would not have to meet the Securities and Exchange Commission's segment reporting requirements, but the client wants to know what happens if they reorganize as a corporation when they move into the Canadian market. Discuss how the Securities and Exchange Commission's segment reporting requirements apply to corporations.