In the early of 2008, Person D and Person L formed a cake Company MG. The Company was a good producer of various cakes and they were specialized in few cakes. Person D did the baking activity and Person L took over the marketing and distribution. The company grew rapidly with good quality and sound marketing. After the article in the leading magazine, the sales of Company MG exploded and so Person D left his job followed by Person L. The company hired new workers for the fast growth of the company for experiencing cash flow and capacity issues. The company was still growing and was approached by various stores for their cakes. The couple has operated the company as a sole proprietorship. Characters of the case: Person D. Person L. Company MG. Magazine GD. Adequate information: Company MG faces cash flow and capacity problems. Company MG’s demand increases. Even national level markets approach them for delivering their products. To determine: The advantages and disadvantages of changing the company to a corporation from a sole proprietorship.

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Answer 1

Question

Chapter 1, Problem 2M

Summary Introduction

Case summary:

In the early of 2008, Person D and Person L formed a cake Company MG. The Company was a good producer of various cakes and they were specialized in few cakes. Person D did the baking activity and Person L took over the marketing and distribution. The company grew rapidly with good quality and sound marketing.

After the article in the leading magazine, the sales of Company MG exploded and so Person D left his job followed by Person L. The company hired new workers for the fast growth of the company for experiencing cash flow and capacity issues. The company was still growing and was approached by various stores for their cakes. The couple has operated the company as a sole proprietorship.

Characters of the case:

Person D.

Person L.

Company MG.

Magazine GD.

Adequate information:

Company MG faces cash flow and capacity problems.

Company MG’s demand increases. Even national level markets approach them for delivering their products.

To determine: The advantages and disadvantages of changing the company to a corporation from a sole proprietorship.

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Students have asked these similar questions

What advantages does a corporation have over a sole proprietorship? Whatare the disadvantages of a corporation?

What are advantages and disadvantages of changing the company organization from sole proprietorship to an LLC?

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Answer 2

Question

Chapter 1, Problem 2M

Summary Introduction

Case summary:

In the early of 2008, Person D and Person L formed a cake Company MG. The Company was a good producer of various cakes and they were specialized in few cakes. Person D did the baking activity and Person L took over the marketing and distribution. The company grew rapidly with good quality and sound marketing.

After the article in the leading magazine, the sales of Company MG exploded and so Person D left his job followed by Person L. The company hired new workers for the fast growth of the company for experiencing cash flow and capacity issues. The company was still growing and was approached by various stores for their cakes. The couple has operated the company as a sole proprietorship.

Characters of the case:

Person D.

Person L.

Company MG.

Magazine GD.

Adequate information:

Company MG faces cash flow and capacity problems.

Company MG’s demand increases. Even national level markets approach them for delivering their products.

To determine: The advantages and disadvantages of changing the company to a corporation from a sole proprietorship.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 3

Question

Chapter 1, Problem 2M

Summary Introduction

Case summary:

In the early of 2008, Person D and Person L formed a cake Company MG. The Company was a good producer of various cakes and they were specialized in few cakes. Person D did the baking activity and Person L took over the marketing and distribution. The company grew rapidly with good quality and sound marketing.

After the article in the leading magazine, the sales of Company MG exploded and so Person D left his job followed by Person L. The company hired new workers for the fast growth of the company for experiencing cash flow and capacity issues. The company was still growing and was approached by various stores for their cakes. The couple has operated the company as a sole proprietorship.

Characters of the case:

Person D.

Person L.

Company MG.

Magazine GD.

Adequate information:

Company MG faces cash flow and capacity problems.

Company MG’s demand increases. Even national level markets approach them for delivering their products.

To determine: The advantages and disadvantages of changing the company to a corporation from a sole proprietorship.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 4

Question

Chapter 1, Problem 2M

Summary Introduction

Case summary:

In the early of 2008, Person D and Person L formed a cake Company MG. The Company was a good producer of various cakes and they were specialized in few cakes. Person D did the baking activity and Person L took over the marketing and distribution. The company grew rapidly with good quality and sound marketing.

After the article in the leading magazine, the sales of Company MG exploded and so Person D left his job followed by Person L. The company hired new workers for the fast growth of the company for experiencing cash flow and capacity issues. The company was still growing and was approached by various stores for their cakes. The couple has operated the company as a sole proprietorship.

Characters of the case:

Person D.

Person L.

Company MG.

Magazine GD.

Adequate information:

Company MG faces cash flow and capacity problems.

Company MG’s demand increases. Even national level markets approach them for delivering their products.

To determine: The advantages and disadvantages of changing the company to a corporation from a sole proprietorship.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 5

Chapter 1, Problem 2M

Summary Introduction

Case summary:

In the early of 2008, Person D and Person L formed a cake Company MG. The Company was a good producer of various cakes and they were specialized in few cakes. Person D did the baking activity and Person L took over the marketing and distribution. The company grew rapidly with good quality and sound marketing.

After the article in the leading magazine, the sales of Company MG exploded and so Person D left his job followed by Person L. The company hired new workers for the fast growth of the company for experiencing cash flow and capacity issues. The company was still growing and was approached by various stores for their cakes. The couple has operated the company as a sole proprietorship.

Characters of the case:

Person D.

Person L.

Company MG.

Magazine GD.

Adequate information:

Company MG faces cash flow and capacity problems.

Company MG’s demand increases. Even national level markets approach them for delivering their products.

To determine: The advantages and disadvantages of changing the company to a corporation from a sole proprietorship.

Answer 6

Chapter 1, Problem 2M

Summary Introduction

Case summary:

In the early of 2008, Person D and Person L formed a cake Company MG. The Company was a good producer of various cakes and they were specialized in few cakes. Person D did the baking activity and Person L took over the marketing and distribution. The company grew rapidly with good quality and sound marketing.

After the article in the leading magazine, the sales of Company MG exploded and so Person D left his job followed by Person L. The company hired new workers for the fast growth of the company for experiencing cash flow and capacity issues. The company was still growing and was approached by various stores for their cakes. The couple has operated the company as a sole proprietorship.

Characters of the case:

Person D.

Person L.

Company MG.

Magazine GD.

Adequate information:

Company MG faces cash flow and capacity problems.

Company MG’s demand increases. Even national level markets approach them for delivering their products.

To determine: The advantages and disadvantages of changing the company to a corporation from a sole proprietorship.

Answer 7

Chapter 1, Problem 2M

Summary Introduction

Case summary:

In the early of 2008, Person D and Person L formed a cake Company MG. The Company was a good producer of various cakes and they were specialized in few cakes. Person D did the baking activity and Person L took over the marketing and distribution. The company grew rapidly with good quality and sound marketing.

After the article in the leading magazine, the sales of Company MG exploded and so Person D left his job followed by Person L. The company hired new workers for the fast growth of the company for experiencing cash flow and capacity issues. The company was still growing and was approached by various stores for their cakes. The couple has operated the company as a sole proprietorship.

Characters of the case:

Person D.

Person L.

Company MG.

Magazine GD.

Adequate information:

Company MG faces cash flow and capacity problems.

Company MG’s demand increases. Even national level markets approach them for delivering their products.

To determine: The advantages and disadvantages of changing the company to a corporation from a sole proprietorship.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 1.1 - What is the capital budgeting decision?Ch. 1.1 - What do you call the specific mixture of long-term...Ch. 1.1 - Prob. 1.1CCQ Ch. 1.2 - Prob. 1.2ACQ Ch. 1.2 - Prob. 1.2BCQ Ch. 1.2 - Prob. 1.2CCQ Ch. 1.2 - Prob. 1.2DCQ Ch. 1.3 - Prob. 1.3ACQ Ch. 1.3 - What are some shortcomings of the goal of profit...Ch. 1.3 - Prob. 1.3CCQ

Solution Summary: The author explains the advantages and disadvantages of changing a sole proprietorship to corporation, which are similar to the benefits of the Limited Liability Company.

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Chapter 1 Solutions