Question

Natheline Dor 1-8. Identification of form of business. 1-7. Identification of form of business For each of the following, insert a capital letter to identify which form of business the item represents. Use the letter A for proprietorship, B for partnership, or C for corporation. At the end of the 1. Georgette Green begins a pet care business by investing $5,000. year, she will include the business income or loss on her personal income tax return. 2. Additional paid-in capital for the Trailblazer Company is $8 per share. 3. Bronson Compaunyresents a statement of reasind carnings in is financial statements at year-end. 4. Jean Johnson's home health care business does not have liability separate from herself. 5, Grand Canyon Company's retained earnings balance is S5 million. 6. Jim Moore and his daughter, Jerra Moore, agree that 60% of their company's net profit 7. Michael Johnson and Joaquin Nunoz each invested $10,000 in their computer will go to Jim and 40% ofthe net profit will go to Jem. consulting business, and received shares of the company's stock in exchange for their investments. 8. Tamara Bryant's veterinary clinic has separate liability. She is the only owner. 9. Alan and David Washington own an automobile repair garage. Alan's capital balance is $8,000 and David's capital balance is $7,000. 10. Crown Candy Company presents a statement of owner's capital in its annual financial statements.

Answer 1

1. A. (since only she is investing the business and will show any income earned from it under her personal return).

2 . C . (Since additional paid in capital arises when stocks are issued at more than their face value and it is possible only in case of corporation ).

3 . C . (Since Bronson company presents retained earnings in it's financial statements and it is obligatory to present only for corporations, thus, it is a corporation)

4. A. (Since Jean Johnson home home health care business does not have liability separate from herself and in case of proprietorship liability of business is also the liability of owner itself.)

5 . C . (Since grand canyon company's retained earnings is there, and only corporations have retained earnings)

6. B . (It is a partnership concern since there is a profit sharing arrangement between Jim Moore and jeera Moore )

7 . C . (Since Micheal Johnson Joaquin nunoz received share of company in exchange of their investment )

8. C . (Since Tamara braynt's veterinary clinic has separate liability which is possible only in case of corporation )

9 . B . (Since Alan and david both owns a repair garage together and have capital balance thus , clearly it is a partnership arrangement.

10 . C . (Since crown candy company presents a statement of owner's capital in it's annual financial statement which is mandatory only in case of corporations )