The Price is Right!Utilizing 1 of these public companies—Target, Coke, Pepsi, Wal-Mart, or J. P. Morgan—determine the right price for that company’s stock in the following 5 easy steps:Visit

1/28/2019 Module 4: Assignment - Principles of Accounting II - AIS8 - 01-08-19 - Sect1 https://classroom.aspen.edu/d2l/le/content/38420/viewContent/1929208/View 1/4 Rem em ber to s u bm it y o ur w ork fo llo w in g th e file n am in g c o n ve n tio n F ir s tIn it ia l. L astN am e_M 01.d ocx . F or e xa m ple , J .S m it h _M 01 .d ocx. R em em ber th at it is n ot n ece ssa ry to m anually ty p e in th e file e xte nsio n; it w ill a uto m atic a lly a ppend.

S ta rt b y r e ad in g a n d f o llo w in g t h ese in str u ctio ns: 1. Q uic kly s kim th e q uestio ns o r a ssig nm en t b elo w a nd th e a ssig nm ent r u bric to h elp y o u fo cu s. 2. R ead th e r e quir e d c h apte r(s ) o f th e te xtb ook a nd a ny a ddit io nal r e co m mended re so urc e s. S om e a nsw ers m ay r e quir e y o u to d o a ddit io nal r e se arc h o n th e In te rn et o r in o th er r e fe re nce s o urc e s. C hoose y o u r s o u rc e s c a re fu lly . 3. C onsid er th e d is cu ssio n a nd th e a ny in sig hts y o u g ain ed fr o m it . 4. C re ate y o ur A ssig nm ent s u bm is sio n a nd b e s u re to c it e y o u r s o urc e s, u se A PA sty le a s r e quir e d, c h eck y o ur s p ellin g. A ssig nm en t:

E xerc is e # 1: O pen th e m ost r e ce nt K ello gg's A nnual R eport a nd e xp la in w hy K ello gg’s i s n ot c la ssif ie d a s a p artn ers h ip .

G o to th e c o nso lid ate d b ala nce s h e et in th e a nnual r e port fo r K ello gg’s C om pany. W hat is th e a m ount o f r e ta in ed e arn in gs in th e m ost r e ce n t y e a r? W hat is th e p ar v a lu e o f th e sto ck? ( C lic k o n th e K ello gg p df file ) E xerc is e # 2: In G ood C om pany T he w ait r e ss s e t d ow n a p la te o f n ach o s a nd tw o p in ts o f b eer in fr o nt o f S ta n a nd h is o ld c o lle ge b uddy, R on E bbers . E ve r s in ce th ey’d r u n in to e ach o th er a t S ta n’s S ubw ay re sta ura nt, th e tw o h ad r e kin dle d th eir fr ie ndsh ip o ve r b eer a nd n ach os a t a lo ca l re sta ura nt.

“ S ale s s till o n th e u p a nd u p?” R on a ske d S ta n. “ Y ep. It ju st d oesn ’t s e em to m atte r h ow w eak th e e co nom y is ,” s a id S ta n. “ P eople w ill a lw ays w ant a s a n dw ic h th at’s h ealt h y, g re at ta stin g, a nd a g ood v a lu e.” A nd n ow ,” S ta n lif te d a g la ss, “ s a lu — a to ast— beca u se a s o f to day I’m a c o rp ora tio n!” “ C heers , S ta n th e M an!” e xcla im ed R on a nd c lin ke d S ta n’s b eer m ug. “ B ut d oesn ’t i n co rp ora tin g c o st y o u m ore m on ey in le gal fe es a nd ta xe s? ” “ W ell, th at m ay b e tr u e, but if I d on’t in co rp ora te a nd a nyth in g g oes w ro ng o r s o m e w acko s u es m e, it c o uld c o st m e m y s h ir t! N ow I h ave lim it e d lia bilit y , b ut I s till p ay w ages to m y e m plo ye es, s e nd in m y r o ya lt y fe es to S ubw ay, a nd m uch o s p ro fit s s till g o to m e.” “ M ayb e I s h ould b uy s to ck in S ub w ay,” R on in te rru pte d. “ I’v e b een d abblin g in th e m ark e t la te ly a nd S ubw ay s e em s lik e a g ood b et!” “ U nfo rtu nate ly , y o u c a n’t b uy s to ck in S ubw ay,” s a id S ta n. “ D octo r’s A sso cia te s, th e c o rp ora tio n th at o w ns th e S ubw ay b ra nd, is p riv a te ly o w ned b y th e fo unde rs F re d D eLuca a nd D r. P ete r B uck.

“D octo r’s A sso cia te s? ” S ta n e xcla im ed . “ T hat’s s tr a nge. I k n o w th e fo od h as h elp ed people lo se w eig ht a nd e at h ealt h y, b ut is S ubw ay r u n b y a h ealt h -c a re o utfit ? ” 1/28/2019 Module 4: Assignment - Principles of Accounting II - AIS8 - 01-08-19 - Sect1 https://classroom.aspen.edu/d2l/le/content/38420/viewContent/1929208/View 2/4 “N o, it ’s a ctu ally k in d o f in te re stin g. In 1 965 F re d D eLuca w as ju st a te enager w ho w ante d to g o to c o lle ge a nd b eco m e a d octo r, b ut h e d id n’t h ave e nough m oney.

T hen h is fa m ily fr ie nd, P ete r B uck, lo aned h im th e m on ey to s ta rt a s u bm arin e sa ndw ic h jo in t. D eLuca , o f c o urs e , n eve r d id b eco m e a d octo r, b ut P ete r B uck h old s a P h.D . in n ucle ar p hysic s, s o th ey c a lle d th em se lv e s D octo r’s A sso cia te s— th ey’r e th e ‘d octo rs ’ a nd w e fr a nch is e es a re th e ‘a sso cia te s.’” “ I g uess w e a ll h ave d re am s th at w e d on’t c a rry o ut,” R on m use d. “ H ey, d on’t lo ok s o tr is te , a m ig o. I k n ow y o u’r e s tu ck in a d ead-e nd jo b n ow , b ut m ayb e n ow is th e tim e to t h in k a bout n ew o pportu nit ie s.” “ Wh addaya m ean?” R on a ske d .

“T here ’s a g re at s p ace o n A la m eda A ve n ue o n th e o th er s id e o f L os P alm os— near th at fa ncy n ew a partm ent c o m ple x. I’v e b een th in kin g o f e ve n tu ally o penin g u p a noth er sto re , b ut I d on’t w ant to g o it a lo ne. H ow eve r, I m ig ht c o n sid er g oin g in to a p artn ers h ip w it h y o u to o w n S ubw ay n um ber 2 .” “ W ell, g iv e n th e lia bilit y r is ks y o u ju st m en tio ned— whic h I a ssu m e a pply to p artn ers h ip s as w ell a s s o le p ro prie to rs h ip s, w hat a bout a c o rp ora tio n?” s a id R on e agerly . “ Y ou c o uld b e th e m ajo rit y s h are hold er a nd I c o u ld h ave a s m alle r in te re st in th e r e sta ura nt u ntil I le arn th e r o pes a nd e ve ntu ally b u y y o u o ut.” “ Wh oa th ere . L et’s n ot ta lk a bou t b uyin g a nyo n e o ut ju st y e t,” la ughed S ta n. “ B efo re y o u d o a nyth in g— if y o u’r e s e rio us a bout b ein g a S ubw ay o w ner— yo u’ll n eed to g o to S ubw ay U niv e rs it y .” R on r a is e d h is g la ss, “ S alu te .” “ N o m an, s a lu d,” c o rre cte d S ta n. “ A to ast. T o o pportu nid ades d el fu tu ro y a m is ta d. T o fu tu re o pportu nit ie s a nd fr ie ndsh ip .” T a sks 1. Wh at a re a ll th e a dva nta ges a nd d is a d va n ta ges o f fo rm in g a c o rp ora tio n? 2. Wh at d o y o u th in k is th e b est w ay fo r S ta n a nd R on to o w n a S ubw ay r e sta ura nt jo in tly ? P artn ers h ip o r c o rp ora tio n? W hy? 3. F ro m th e fo llo w in g p artia l m ix e d lis t, s e le ct th e a ppro pria te tit le s a nd p re pare a s to ckh old ers ’ e quit y s e ctio n u sin g th e s o u rc e -o f- c a p it a l a ppro ach a s s h ow n in th e B lu eprin t e xa m ple fo r U nunoctiu m C orp ora tio n o n J u ly 3 1, 2 01X . O ff ic e E quip m ent $11 0,0 00 Land 215,0 00 P aid -In C apit a l in E xce ss o f P ar V alu e- P re fe rre d S to ck 8 5,0 00 1/28/2019 Module 4: Assignment - Principles of Accounting II - AIS8 - 01-08-19 - Sect1 https://classroom.aspen.edu/d2l/le/content/38420/viewContent/1929208/View 3/4 Build in g 70,0 00 A cco unts R ece iv a ble 1 35,0 00 N ote s R ece iv a ble 3 8,0 00 O rg aniz a tio n C osts 1 0,5 00 C om mon S to ck, $ 8 p ar v a lu e ( 6 0 ,0 00 sh are s is su ed a nd o uts ta ndin g; 8 5,0 00 sh are s a uth oriz e d) 81,0 00 R eta in ed E arn in gs 200,0 00 S ubscrip tio ns R ece iv a ble -C om mon S to ck 8 1,0 00 P ate nts 1 2,0 00 P re fe rre d 1 7% S to ck, $ 49 p ar v a lu e ( 6 000 sh are d is su ed; 8 ,5 00 s h are d a uth oriz e d ) 294,0 00 C om mon S to ck S ubscrib ed a t P ar 240,0 00 P aid -In C apit a l in E xce ss o f P ar V alu e- C om mon S to ck 1 7,0 00 F ig ure 6 4 . P erfo rm th e fo llo w in g: a. J o urn aliz e th e e ntr ie s to r e co rd th e s to ck s u b scrip tio n p la n fo r O ra nge C o. O n Ju ne 1 , O ra nge r e ce iv e d s u bscrip tio ns fo r 5 00 s h a re s o f $ 24 p ar v a lu e c o m mon sto ck a t $ 48 p er s h are . T he b uye r w ill p ay tw o e qual in sta llm en ts o n A ugust 3 1 and N ove m ber 3 0.

b. F ro m th e fo llo w in g, c a lc u la te th e d iv id ends fo r c o m mon a nd p re fe rre d s to ck:

8 % fu lly p artic ip atin g p re fe rre d s to ck.

T he b oard d ecla re d a $ 210,0 00 d iv id end.

P re fe rre d s to ck 5 ,0 00 s h are s, $ 50 p ar v a lu e; c o m mon s to ck 1 0,0 00 s h are s, $ 100 p ar. 1/28/2019 Module 4: Assignment - Principles of Accounting II - AIS8 - 01-08-19 - Sect1 https://classroom.aspen.edu/d2l/le/content/38420/viewContent/1929208/View 4/4 5. T he p artn ers h ip o f J a ckso n, R ackle y, a nd S urb er is b ein g liq uid ate d. A ll g ain s and lo sse s a re s h are d in a 3 :2 :1 r a tio . B efo re liq uid atio n th eir b ala nce s h eet lo oks a s fo llo w s: C ash $ 23,0 00 Lia bilit ie s $7,7 00 O th er A sse ts 1 5,0 00 A . J a ckso n, C apit a l 11 ,0 00 C . R ackle y, C apit a l 18,1 00 J. S urb er, C apit a l 1,9 00 To ta l A sse ts 3 8,7 00 To ta l L ia bilit y + E quit y $ 38,7 00 F ig ure 7 J o urn aliz e th e e ntr ie s n eeded in th e liq uid atio n p ro ce ss u nder th e fo llo w in g in dependent s it u atio ns a nd a ssu m e a d ate o f J u ly 1 , 2 01X , fo r s a le o f a sse ts a nd a d ate o f J u ly 1 5 to p ay o ff lia bilit ie s a nd d is tr ib ute c a sh to p artn ers : a . S it u atio n 1 : S old o th er a sse ts fo r $ 33,9 00. b. S it u atio n 2 : S old o th er a sse ts fo r $ 6,9 00. c. S it u atio n 3 : S old o th er a sse ts fo r $ 2,1 00. S urb er c a n not c o ve r h is d efic it .