hello, Please see attached assignment I need help with. Thanks

PROMT Imagine you have been working at Quality's CPA firm for two years now. Your great work has not gone unnoticed, and the CPA partners would like to help you grow within the firm by getting you more contact with some of the larger clients. To accomplish this goal, the partners have asked you to assemble a report for one of the firm's most influential and growing clients, to help address some key areas of concern for the client. Your goal is to assemble the information necessary to address each of the client's questions, outlined below. You will be required to submit all of your responses in the form of a written report, with accompanying spreadsheets as supporting documentation Required: 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 do these methods impact the firm's balance sheet? B. Illustrate how the company could split profits and losses. C. Describe what happens if the partnership doesn't do well and the company has to dissolve it, or one of the partners becomes insolvent. D. Illustrate the dissolution process by creating a hypothetical cash distribution schedule. Ensure all information is entered accurately. Corporation: The company is also considering structuring its business as a corporation, but is aware that there are a lot of complex issues to consider when accounting for an incorporated entity. The company is concerned about the following key areas: A. Differentiate between various forms of bankruptcy and restructuring that the firm should understand. 1. Summarize the key points of interest if the firm fell on hard times 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 situation? 3. Illustrate hypothetical calculations that would be done to help creditors understand how much money they might receive if the company were to liquidate. Ensure all information is entered accurately. Please refer to the illustration (Exhibit 13.2) on page 592 from your textbook to view potential calculations. (I attached that exhibit 13.2) Please note that I need an original document (2-3pages) not another student paper and please provide proper references and citation. Thanks. Running Head: Partnership and Corporate Accounting 1 Partnership and Corporate Accounting Name of Student: Name of Institute Date Partnership and Corporate Accounting 2 Process and Methods Used to Account for Partnership Formation A. A partnership is a relation between persons who carry out a business with an agenda of making a profit. The process of forming a partnership is straightforward, and it requires a minimum of two people to a maximum of fifty except for professional firms such as doctors, accountants among others where the highest number of partners does not exceed twenty. During the process of the formation, the partners create a partnership deed that provides guidelines on how the partnership will be run and the relationship between them (Kenton, 2010). The methods of partnership accounting involve capital account where all partner's equity investment is recorded, partners' loan account that is used to record the cash borrowed by each partner. Finally, it involves drawings accounts that record any cash withdrawal from the business in anticipation of yearly profits. This method eases the process of accounting in partnership as one can identify the areas where cash is being misused and also facilitates easy book keeping. B. During the partnership formation process, the partnership deed is an important document that provides guidelines on the activities of the business and how to resolve various issues that may arise among the members. When the partnership gains profits or losses, it is closed to the individual Capital accounts of the partners [BKe10]. The manner by which the profits or losses could be split will depend on the decision agreed by the members during its formation. The profits or losses could be divided equally or at times will be split depending on the total capital invested by each member in the partnership. C. Dissolution of a partnership is a process whereby the affairs of the partnership are wound up depending on the causes leading to the dissolution. There are factors that could result in the dissolution of a partnership such as the bankruptcy of the business, the death of partners, completion of the intended business or upon agreement by the partners. Therefore, once the Partnership and Corporate Accounting partnership has been dissolved, the partners have to settle their accounts where the losses are paid first. The assets of the firm are used to pay off any debt, and the partners are then paid off proportionally. D. When a partnership have been dissolved by selling the assets and the cash is sufficient to pay all its creditors, the next step is to determine the amount each partner receives. Let us assume that Johnson, Charlie, Claire and Britney formed a partnership and had agreed to share profits and losses in the ratio 4:3:2:1. At the end of the trading period, they had to collect their receivables as well as sell the remaining assets. If they had a capital equity of $16,000, $18,500, $13,000 and $7,500 respectively while the miscellaneous assets realized total to $68,000 in cash and the resulting loss of $12,000 allocated to the partners, liabilities paid in full and the remaining cash distributed accordingly. Then a schedule of the partnership would be as 3 Partnership and Corporate Accounting follows. Corporation: bankruptcy Bankruptcy is a state that is legally recognized under the law where a person or a business entity cannot repay its creditors, and it is imposed through a court order. There are four 4 Partnership and Corporate Accounting 5 types of bankruptcy and are named for their respective chapters according to the United States Bankruptcy Code. This includes chapter seven, eleven, twelve and thirteen. The type of bankruptcy filed will often depend on various factors such as whether you are an individual or a corporate. If the firm fell on hard times and the only way forward was to file for bankruptcy, various issues should be considered. If the business has no future in the business operations, it will file for Chapter seven bankruptcy but if the firm intends to continue operating, it could file for chapter eleven, where the companies continue to run, maintains all its assets as it comes up with a plan on how it intends to pay off its creditors. The ethical implications to be factored in a while decided whether to file for bankruptcy or not is whether you can pay off the creditors within a reasonable time if the answer is yes then it would be unethical to file for bankruptcy (Boettcher & Cavanagh, 2014). 2. There are situations where a company can be forced into bankruptcy by its creditors. The benefit of filing an involuntary bankruptcy is the ability to recover the debtor's property as well as insider and fraudulent transfers. When forced into involuntary bankruptcy, a debtor within twenty days can file an objection that disputes the issue and proving that the debtor does not pay his debts when they fall due could be difficult. Secondly, when an involuntary bankruptcy is filed under chapter seven, the firms could respond by filing a voluntary bankruptcy under chapter eleven. This gives the firm control over the case (Pinney, 2015). 3. Let us consider the above illustration of the partnership between Johnson, Charlie, Claire, and Britney. Assume that the firm owned a land and the building in which the company was located, and it is estimated it would be sold at about ten percent above the book value of 308,000. If the firm liquidates the administrative cost estimates to be 15,500 Partnership and Corporate Accounting 6 References Partnership and Corporate Accounting Boettcher, J., & Cavanagh, G. (2014). Ethical Issues that arise in Bankruptcy. Business and Society Review, 119(4), 473-496. Kenton, B. (2010). Setting up the Partnership Function. HR: The Business Partner. Pinney, T. (2015, October 29). Involuntary Bankruptcy Petitions - Use with Cautions. Retrieved from White and Williams LLP: http://www.whiteandwilliams.com/resources-alertsInvoluntary-Bankruptcy-Petitions-Use-With-Caution.html 7