ACC 690 Milestone One Guidelines and Rubric
Overview: The final project for this course is the creation of a portfolio consisting of a report, spreadsheets, and a PowerPoint presentation. You will be placed in
a real-world scenario in which you will take the role of an associate in a certified public accountant (CPA) firm. The CPA partners in the scenario would like to
help you grow within the firm by getting you more contact with some of the larger clients. You will address questions from one of the firm’s most influential and
growing clients by assembling and presenting the necessary information in report and presentation format. Your presentation should include spreadsheet
examples. Topics addressed in the portfolio will cover partnership formation, bankruptcy, and acquisition of another company (which may be international).
Your three milestone assignments will consist of shorter reports and supporting spreadsheets, which will prepare you for completing a comprehensive report,
spreadsheets, and a presentation. You should use your instructor’s feedback from the milestone submissions to improve your final report, spreadsheets, and
presentation.
Prompt: In Milestone One, you will complete a report covering Section I and Part A of Section II of the final project. In the report you will discuss the key issues
of partnership, such as formation, splitting profits/losses, dissolution, and a cash distribution schedules. You will also discuss the issue of bankruptcy, both
voluntary and forced, as well as liquidation.
Specifically, the following critical elements must be addressed:
I.
Partnership: The company is considering forming a partnership and wants to be sure it understands the key issues regarding partnership formation,
income distribution, and liquidation.
A. Explain the process and methods used to account for partnership formation. How do these methods impact the firm’s balance sheet?
B. Illustrate how the company could split profits and losses.
C. Describe what happens if the partnership doesn’t do well and the company has to dissolve it, or one of the partners becomes insolvent.
D. Illustrate the dissolution process by creating a hypothetical cash distribution schedule. Ensure all information is entered accurately.
II. Corporation: The company is also considering structuring its business as a corporation, but is aware that there are a lot of complex issues to consider
when accounting for an incorporated entity. The company is concerned about the following key areas:
A. Differentiate between various forms of bankruptcy and restructuring that the firm should understand.
1. Summarize the key points of interest if the firm fell on hard times and had to file voluntary bankruptcy. What ethical implications should
be considered when debating whether or not to file bankruptcy?
2. Identify the key areas of concern if the firm fell on hard times and their creditors forced them into bankruptcy. What defenses are
available in this situation?
3. Illustrate hypothetical calculations that would be done to help creditors understand how much money they might receive if the company
were to liquidate. Ensure all information is entered accurately. Please refer to the illustration (Exhibit 13.2) on page 592 from your
textbook to view potential calculations.
Guidelines for Submission: Your report must be submitted as a 2- to 3-page Word document with double spacing, 12-point Times New Roman font, one-inch
margins, and at least two sources (in addition to your textbook) cited in APA format. Your accompanying spreadsheets must be submitted as Microsoft Excel
files.
Critical Elements
Partnership:
Formation
Proficient (100%)
Explains the process and methods used to
account for partnership formation and how
they impact the firm’s balance sheet
Partnership: Split
Illustrates the options for distribution of
profits and ensures all information is
entered accurately
Describes what happens in partnership
dissolution or partner insolvency
Partnership:
Dissolve
Partnership: Cash
Distribution
Schedule
Corporation:
Voluntary
Bankruptcy
Illustrates the dissolution process by
providing an example of a cash distribution
schedule, ensuring accuracy
Summarizes the key points of interest if the
firm had to file voluntary bankruptcy and
discusses the ethical implications that
should be considered
Corporation:
Forced Bankruptcy
Identifies the key areas of concern if the
firm was forced into bankruptcy and the
defenses available in this situation
Corporation:
Liquidate
Articulation of
Response
Illustrates calculations and ensures all
information is entered accurately
Submission has no major errors related to
citations, grammar, spelling, syntax, or
organization
Needs Improvement (75%)
Explains the process and methods used to
account for partnership formation but does
not explain how they impact the firm’s
balance sheet or explanation is cursory or
has inaccuracies
Illustrate the options for distribution of
profits and losses but there are
inaccuracies
Describes what happens in partnership
dissolution or partner insolvency but
description is cursory or has inaccuracies
Illustrates the dissolution process by
providing an example of a cash distribution
schedule, but there are inaccuracies
Summarizes the key points of interest if the
firm had to file voluntary bankruptcy but
does not discuss the ethical implications
that should be considered, or discussion is
cursory or has inaccuracies
Identifies the key areas of concern if the
firm was forced into bankruptcy but does
not identify defenses available, or
identification is cursory or has inaccuracies
Illustrates calculations but there are
inaccuracies
Submission has major errors related to
citations, grammar, spelling, syntax, or
organization that negatively impact
readability and articulation of main ideas
Not Evident (0%)
Does not explain the process and methods
used to account for partnership foundation
Value
12.86
Does not illustrate the options for
distribution of profits and losses
12.86
Does not describe what happens in
partnership dissolution or partner
insolvency
Does not provide an example of a cash
distribution schedule
12.86
Does not summarize the key points of
interest if the firm had to file voluntary
bankruptcy
12.86
Does not identify the key areas of concern
if the firm was forced into bankruptcy
12.86
Does not illustrate calculations
12.86
Submission has critical errors related to
citations, grammar, spelling, syntax, or
organization that prevent understanding of
ideas
Total
9.98
12.86
100%
Book
Values
$210,000
41,000
2,000
15,000
-0-
23,000
3,000
80,000
15,000
B
CHAPLIN COMPANY
Statement of Financial Affairs
June 30, 2014
Available for
Unsecured
Creditors
Assets
Pledged with fully secured creditors:
Land and building
$231,000
Less: Notes payable (long term)
(200,000)
Interest payable
(5,000) $26,000
Pledged with partially secured creditors:
Inventory
$ 45,000
Less: Notes payable (current)
(75,000) -0-
Free assets:
Cash
2,000
Investment in marketable securities
20,000
Dividends receivable
500
Accounts receivable
12,000
Prepaid expenses
1,000
Equipment
32,000
Intangible assets
-0-
Total available to pay liabilities with
priority and unsecured creditors
93,500
Less: Liabilities with priority
(see below in Liabilities)
(36,500)
Available for unsecured creditors
57,000
Estimated deficiency
38,000
$95,000
Unsecured-
Nonpriority
Liabilities
Liabilities and Stockholders' Equity
Liabilities with priority:
Administrative expenses (estimated). $ 21,500
Salaries payable (accrued expenses)
13,000 $ 1,000
Payroll taxes payable (accrued expenses).
2,000
Total
$ 36,500 A
Fully secured creditors:
Notes payable
$ 200,000
Interest payable
5,000
Less: Land and building.
(231,000)
Partially secured creditors:
Notes payable
$ 75,000
Less: Inventory
(45,000) 30,000
Unsecured creditors:
Accounts payable
60,000
Accrued expenses (other than salaries
and payroll taxes).
4,000
Stockholders' equity
-0-
$95,000
D
$389,000
Book
Values
$
-0-
14,000
-0-
200,000
-0-
75,000
60,000
4,000
36,000
$389,000
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