The city of Papagos, Arizona, had a deteriorating bridge in need of repair on a prominent public roadway. The cityposted notices seeking proposals for an artistic bridge design and reconstruction. Davidson Masonry, LLC, which wasowned and managed by Carl Davidson and his wife, Marilyn Rowe, decided to submit a bid to create a decorative concrete structure that incorporated artistic metalwork. They contacted Shana Lafayette, a local sculptor who specializedin large-scale metal creations, to help them design the bridge. The city selected their bridge design and awarded themthe contract for a commission of $184,000.Davidson Masonry and Lafayette then entered into an agreement to work together on the bridge project. DavidsonMasonry agreed to install and pay for concrete and structural work, and Lafayette agreed to install the metalwork ather expense. They agreed that overall profits would be split, with 25 percent going to Lafayette and 75 percent going toDavidson Masonry. Lafayette designed numerous metal sculptures of trout that were incorporated into colorful decorative concrete forms designed by Rowe. Davidson performed the structural engineering. The group worked togethersuccessfully until the completion of the project. Using the information presented in the chapter, answer the followingquestions.1. Would Davidson Masonry automatically be taxed as a partnership or a corporation?

Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
icon
Related questions
Question

The city of Papagos, Arizona, had a deteriorating bridge in need of repair on a prominent public roadway. The city
posted notices seeking proposals for an artistic bridge design and reconstruction. Davidson Masonry, LLC, which was
owned and managed by Carl Davidson and his wife, Marilyn Rowe, decided to submit a bid to create a decorative concrete structure that incorporated artistic metalwork. They contacted Shana Lafayette, a local sculptor who specialized
in large-scale metal creations, to help them design the bridge. The city selected their bridge design and awarded them
the contract for a commission of $184,000.
Davidson Masonry and Lafayette then entered into an agreement to work together on the bridge project. Davidson
Masonry agreed to install and pay for concrete and structural work, and Lafayette agreed to install the metalwork at
her expense. They agreed that overall profits would be split, with 25 percent going to Lafayette and 75 percent going to
Davidson Masonry. Lafayette designed numerous metal sculptures of trout that were incorporated into colorful decorative concrete forms designed by Rowe. Davidson performed the structural engineering. The group worked together
successfully until the completion of the project. Using the information presented in the chapter, answer the following
questions.
1. Would Davidson Masonry automatically be taxed as a partnership or a corporation?

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Understanding Business
Understanding Business
Management
ISBN:
9781259929434
Author:
William Nickels
Publisher:
McGraw-Hill Education
Management (14th Edition)
Management (14th Edition)
Management
ISBN:
9780134527604
Author:
Stephen P. Robbins, Mary A. Coulter
Publisher:
PEARSON
Spreadsheet Modeling & Decision Analysis: A Pract…
Spreadsheet Modeling & Decision Analysis: A Pract…
Management
ISBN:
9781305947412
Author:
Cliff Ragsdale
Publisher:
Cengage Learning
Management Information Systems: Managing The Digi…
Management Information Systems: Managing The Digi…
Management
ISBN:
9780135191798
Author:
Kenneth C. Laudon, Jane P. Laudon
Publisher:
PEARSON
Business Essentials (12th Edition) (What's New in…
Business Essentials (12th Edition) (What's New in…
Management
ISBN:
9780134728391
Author:
Ronald J. Ebert, Ricky W. Griffin
Publisher:
PEARSON
Fundamentals of Management (10th Edition)
Fundamentals of Management (10th Edition)
Management
ISBN:
9780134237473
Author:
Stephen P. Robbins, Mary A. Coulter, David A. De Cenzo
Publisher:
PEARSON