Olivia, who has been sewing since a young age, decided that she would like to open a business called Gowns and Smiles, to make and sell prom and other formal dresses. While starting up, she would like to be the only owner of the business. Further, she does not want to go through a rigorous formation process, pay any fees or worry about making annual business filings for Gowns and Smiles. Assume that Olivia opens Gowns and Smiles as a sole proprietorship. The business grows extraordinarily in the first year and she would like to open a storefront. She would also like to add more principals to the business without changing the business structure. Which of the following options are available to Olivia? I. She can sell equity in Gowns and Smiles. II. She can take on a limited partner. III. She can take on a general partner. IV. She can take on a limited liability partner.
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Multiple Choice
a. I, II, III, and IV
b. II only
c. II and III
d. I, II, and IV
e. None of the choices are correct
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- Claudia is a student at Michiana College near Lake Michigan. She is young, intelligent, and driven to succeed in her studies. Claudia is not sure what she wants to do with her life but she knows she does NOT want to be an accountant! In fact, her closest friends and family members have gently urged her to enroll in anger management ever since she began studying accounting last term. Now Claudia is starting Principles of Accounting II and she is going to try really hard not to punch the wall or throw her book across the room anymore but she makes no promises... Now comes Chapter 14. “Why would a company issue bonds when it could just sell more stock to raise money?” Claudia muttered to herself, fuming. “It’s always better for a company to increase its equity than to increase its debt. Even I know that!” (1) Please evaluate Claudia’s comments. Do you agree? Is there any validity to what she said?Claudia is a student at Michiana College near Lake Michigan. She is young, intelligent, and driven to succeed in her studies. Claudia is not sure what she wants to do with her life but she knows she does NOT want to be an accountant! In fact, her closest friends and family members have gently urged her to enroll in anger management ever since she began studying accounting last term. Now Claudia is starting Principles of Accounting II and she is going to try really hard not to punch the wall or throw her book across the room anymore but she makes no promises... Now comes Chapter 14. “Why would a company issue bonds when it could just sell more stock to raise money?” Claudia muttered to herself, fuming. “It’s always better for a company to increase its equity than to increase its debt. Even I know that!” (2) What is “earnings per share” and how can it be affected by issuing bonds or stocks? How is it calculated?Teasha Pratt will graduate from high school next month and cannot decide what she wants to do. She had originally planned to go to college and major in marketing and accounting, but now she is thinking about opening her own business. Teasha has worked in a gift store for the last two years and gained a lot of experience and knowledge by working with inventory, pricing, customers, and accounting. However, her real interest is in crafts. After conducting some marketing research, Teasha determines that there is a very small market for a craft store (there are currently two craft stores in town), but there is a larger market for a gift store. Teasha decides to open a small gift store in the mall with a loan from the local bank. After much hard work, she locates two suppliers, Gifts Plus Wholesalers and Hearts Manufacturing Corporation, hires employees, buys display equipment, accounting equipment, a cash register, supplies, etc. Three months later, she is ready to open her store.…
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