Match each ofthe definitions in #1-5 with one ofthe following Business Organizat

Question

Match each ofthe definitions in #1-5 with one ofthe following Business Organization structures: Corporation General Partnership Limited Partnership Limited Liability Company Sole Proprietorship ?. Formed by >-2 individuals (or entities), some, but not all, witlh unlimited liability: 2 Formed by-2 individuals (or entities), each with unlimited liability: 3. Easiest to form and the most common business entity: 4. A distinct legal entity treated as a legal "person": s. Entity operates like a partnership and all owners have limited liability:

Explanation / Answer

Ans : Please refer the table, we have matched the options:

1) Amount of dividend paid by Gannon in 2017 = Net Profit - (Retained earnings in 2017- Retained earnings in 2016) = 383000 -(505000 - 455000) = 333000

2) Effective annual tax rate in 2017 = Income Taxes/Pretax ernings =  167000/550000 = 30.36%

3) Commonn shares outstanding = 18000, EPS in 2017 = Net earnings /no. of shares outstanding = 383000/18000 = 21.28

Corporation A distinct legal entity treated as legal "person" General Partnership Formed by >= 2 individuals(or entites) with unlimited liability Limited Partnership Formed by >= 2 individuals(or entites) , some, but not all, with unlimited liability Limited Liability Company Entity operates like a partnership and all owners have limited liability Sole Proprietorship Easiest to form and the most common business entity

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