Joe Bloggs is a successful inventor who has just been awarded a patent in the UK for a new design of new battery-powered device. He is looking to set up his own business to manufacture and distribute the device. Carry out a thorough analysis of the advantages and disadvantages of setting up his business as either a sole trader, a partnership or a limited company.
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Joe Bloggs is a successful inventor who has just been awarded a patent in the UK
for a new design of new battery-powered device. He is looking to set up his own
business to manufacture and distribute the device.
Carry out a thorough analysis of the advantages and disadvantages of setting up his
business as either a sole trader, a
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- Sara is planning to open a construction company in the UK. She understands that a limited company needs more formalities in terms of formation and operation, compared to other forms of business organisations, however, it will be more beneficial to her. Sara is already familiar with the reporting and recording requirements of a partnership since she is a partner at SAZ Hardware in the UK. She asked your help on the following: a. Describe how a company is formed, owned and managed.…Mr Craig has obtained a patent on a new device that lures insects and electrocutesthem once they touch a grid inside the device. He is at the stage of manufacturing thefirst units and marketing the device and has asked you to advise him whether heshould operate as a sole trader, within a partnership, a private company or publiccompany. How would your advice change as the entity grows over time?A friend of yours, a non-accounting student in the JRSSB, has asked for your advice about a potential investment. Your friend is considering purchasing shares in Aurora Cannabis Inc., a company with its head office in Leduc, Alberta, that is publicly traded on the Toronto Stock Exchange and other exchanges (symbol ACB). The company's primary business is the production, distribution, and sale of cannabis related products in Canada and internationally. Your friend thinks this company might be a good investment, as the share price is quite low, but is not sure how to interpret certain parts of the financial statements. In particular, your friend has read note 9 (Biological Assets) and is having difficulty understanding the meaning of this information. (The note disclosure is included as an appendix to this document.) Required: Write a memo to your friend that answers the following questions about the Aurora Cannabis Inc. financial statements. (30 marks) 1) How does the accounting for…
- You are an entrepreneur of a local organic product shop in St. Vincent and the Grenadines, specializing in hair products and other cosmetic products. You are considering based on emerging market trends to expand into Brazil, you decide to choose a joint venture method to move into the country. Why choose this method? what are the benefits of a joint venture?Three of your former classmates from the University of London have started a businesssupplying custom-made construction materials (like pre-fabricated bathroom units) to construction companies and student housing properties. They have offered you a chance to invest in their company as a shareholder. What type of questions would you need to ask them to help assess the risk of this investment opportunity?The topics covered by your questions should include: (Select the best choice below.)A.Profitability (what amount of profits have they been making).B.Dividend payout (how much of the profit is being paid out as dividends over the past years)C.How robust is their business plan?D.Capital structure (financial strength of the business can be assessed by the capital structure and the quality of assets)E.Governance structure (the risk can be assessed by understanding governance structure of the business)F.All of the above.Zumo Wang came to Northern Ireland from China six years ago to study at university for a degree in Computing and Electronics. After graduating he worked as an information technology manager for a computer company and saved his wages to build up the capital needed to invest in his own business. Zumo’s friend Charles Wu, had recently put his computing consultancy business up for sale – ‘PC: IT’. PC: IT was set up ten years ago, and seemed quite successful. The premises were located on a busy street in the town centre of Enniskillen, and operated a ‘collect and return’ service, enabling computers to be serviced without the customer having to leave their home. Upon purchase of the business from Charles, Zumo acquired a number of fixed assets for use in the business. These included a personal computer, a laptop computer and various machines facilitating welding and electronic engineering to be carried out on computer circuit boards, rebuilding computers and other assembly activities. The…
- Zumo Wang came to Northern Ireland from China six years ago to study at university for a degree in Computing and Electronics. After graduating he worked as an information technology manager for a computer company and saved his wages to build up the capital needed to invest in his own business. Zumo’s friend Charles Wu, had recently put his computing consultancy business up for sale – ‘PC:IT’. PC:IT was set up ten years ago, and seemed quite successful. The premises were located on a busy street in the town centre of Enniskillen, and operated a ‘collect and return’ service, enabling computers to be serviced without the customer having to leave their home. Upon purchase of the business from Charles, Zumo acquired a number of fixed assets for use in the business. These included a personal computer, a laptop computer and various machines facilitating welding and electronic engineering to be carried out on computer circuit boards, rebuilding computers and other assembly activities. The main…Helen Rupp is the owner of a successful printing shop. Recently, her business has been increasing, and Helen has been thinking about changing the organization of her business from a proprietorship to a corporation. Discuss some of the advantages Helen would enjoy if she were to incorporate her business.A friend who recently graduated from university is planning to form a partnership. He is planning to carry out his new business with utmost integrity. What reminders can you give your friend to ensure that he can select partners with the same business perspective?
- Karen and Yanique are opening a jewellery store with no competition in the area from which they intend to operate their business. Their fundamental decision is how to organize the business. They anticipate super-profits the first year, with the ability to sell franchises in the future. Although they have enough to start the business now as a partnership, cash flow will be an issue as they grow and as such, they feel the corporate form of operation will be best for the long term. They seek your advice. Requirements: State three (3) of the main advantage they gain by selecting a corporate form of business now. Would you recommend they initially issue preferred or common stock? Why? If the corporation when formed sets a par value for its shares low and issue common stock for a price above par, what is this amount above par called? Can this amount be treated as a gain, income, or profit for the corporation? Please give the reason for your answer.Tom, Linda, and Zach are casual acquaintances. Each of them has a different set of business skills that they believed would be complimentary in forming a new business. Tom excels at creating visions, business development, marketing, and leadership. Linda is a shrewd investor and has access to capital through her own investment company. Zach is a technological wizard and can readily develop software solutions. Tom had an idea for a new social media app, which he presented to Linda and Zach one day during a lunch meeting. Zach felt that he would be able to create the software and agreed to do so for a percentage of the profits. Linda stated that she would be willing to finance the project, also for a percentage of the profits. Before the end of the meal, the three toast “to new adventures” and agree to meet up again soon to work out the details. Excited about the project, Tom immediately returned home and started to develop a business plan. Over the course of the following week, he…Koreen and Yolanda are opening a jewellery store with no competition in the area from which they intend to operate their business. Their fundamental decision is how to organize the business. They anticipate super profits the first year, with the ability to sell franchises in the future. Although they have enough to start the business now as a partnership, cash flow will be an issue as they grow and as such, they feel the corporate form of operation will be best for the long term. They seek your advice. The company’s charter authorizes 1,000,000 shares of common stock and 100,000 shares of preferred stock and the following are the transactions for consideration: KY Jewelers purchased a piece of land from the original owner. In payment for the land, KY Jewelers issues 350,000 shares of common stock with $1.00 par value. The land has been appraised at a market value of $1,350,000 The company sold 110,000 shares of common stock with $1 par value. Issued 22,000 shares of $18 par value…
