ACC 690 Prompt: In Milestone One, you will complete a report covering Section 1 and Part A of Section 11 of the final project. In the report you will discuss the Key issues of partnership, such as formation, spiltting profits/losses, dissolution, and a cash distribution schedules. You will also discuss the issue of bankruptcy, both voluntary and forced, as well as liquidation. Specifically, the following critical elements must be addressed: 1. Partnership: The company is considering forming a partnership and wants to be sure it understands the key issues regarding partnership formation, income distribution, and liquidation. A. Explain the process and methods used to account for partnership formation. How does these methods impact the firm's balance sheet? B. Illustrate how the company could split profits and losses. C. Decribe what happens if the partnership doesn't do well and the company has to dissolve it, or one of the partners become insolvent. D. Illustrate the dissolution process by creating a hypothetical schedule. Ensure all information is entered accurately. 11 Corporation: The company is also considering structuring its businesses at a corporation, but is aware that there are alot of complex issues to consider when accounting for an incorporated entity. The company is concern about the following key areas: A. Differentiate between the various forms of bankruptcy and restructuring that the firm should understand. 1. Summerize the key points of interest if the firm fell on hard time and had to file voluntary bankruptcy. What ethical implications should be considered when debating whether or not to file bankruptcy? 2. Identify the key areas of concern if the firm fell on hard times and their creditors forced them into bankruptcy. What defenses are available in this situatiion? 3. Illustrate hypothetical calculations that would be done to help creditors understand how much money they might receive if the company were to liqudiate. Ensure all information is entered accurately. Please refer to the illustration(Exhibit 13.2) on page 592 from your textbook to view potential calculations. Critical Elements Partnership: Formation--Explains the process and methods used to account for partnership formation and how they impact the firm's balance sheet. Partnership:Split--Illustraates the options for distribution of profits and losses but htere are inaccuracies. Partnership: Dissolve--Describes what happens in partnership dissolution or partner insolvency. Partnership: Distribution Schedule--Illustrates the dissolution process by providing an example of a cash distribution schedule ensuring accuracy.. Corporation: Voluntary Bankruptcy-- Summarizes the key points of interest if the firm had to file voluntary bankruptcy and discusses the ethical implications that should be considered. Corporation: Forced Bankruptcy--Identifies the key areas of concern if the firm was forced into bankruptcy and the defenses available in this situation. Corporation: Liquidate---Illustrates calculations and ensures all information is entered accurately.