Chapter 2, Problem 1DQ

Use the information below to answer the next five questions:   Ahne, a sole proprietor owns a daycare center named Azsh™. Her business operation was rapidly expanding but her capacity to support the operation needs and to manage the business was limited. She decided to ask her friend Johnny, to help him in the business. They agreed to be partners in the business, and consequently, the business needs to be converted into a partnership. The data of Azsh™ before the partnership formation were as follows:   Cash       80,000.00 Accounts Receivable       50,000.00 Supplies       15,000.00 Land      100,000.00 Building    250,000.00   Accumulated Deprecation     (50,000.00)    200,000.00 Furniture and Fixtures    100,000.00   Accumulated Depreciation     (20,000.00)     80,000.00 Total Assets      525,000.00 Accounts Payable       25,000.00 Mortgage Payable      120,000.00 Ahne, Capital      380,000.00 Total…

Which business vehicle(Company or partnership) you will adopt if you are to set up a business and give reasons to support your choice.

Riki and Sarah, are the owners of Hello Fish Restaurant, a general partnership. What are the chief characteristics, advantages, and disadvantages of this form of business organization? Give an example of how there could be liability for one or both partners based on something that could happen at the restaurant. What organizational structure do you suggest they should form in place of the partnership?