Hi guys, I\'m doing my milestone about walmart company and need your help with t

Question

Hi guys, I'm doing my milestone about walmart company and need your help with this question?

Business Entities—Partnerships and Corporations Assume your company is involved in a major lawsuit and the probable damages are estimated to be $2,000,000.... the rquirements are as following;

A. Describe the effects damage estimates would have on the financial statements of a corporation and a partnership.

B. How do disclosure requirements differ from a corporation to a partnership and what information is required?

C. Are the shareholders at risk for any personal liability with the company set up as a corporation? Defend your response.

D. If your company was set up as a partnership, would the partners be at risk for personal liability? Defend your response.

thank you in advace!

Explanation / Answer

a) since there is probable chances of loss in the lawsuit the compnay and partnership firm would have to create a provsiion for the lawsuit. it will result in reduction in the profit of the company.

b) in corporate the probable loss on account of lawsuit and to be given in the notes to accounts of the company depending on the cicumstances of the cases as on the date of disclosure.

c) The share holders are liable only to the extent of the value of their shares and not more than that.

d) the partners could be held personally liable depending on the form of partnership and circumstances of the case.

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