B CRITICAL THINKING – DECISION MAKING ACROSS ORGANIZATION

| April 14, 2018

B CRITICAL THINKING – DECISION MAKING ACROSS ORGANIZATION Kobe Bryant and Lebron James, two professionals in the finance area, have worked for San Miguel Leasing for a number of years.San Miguel Leasing is a company that leases high-tech medical equipment to hospitals.Kobe and Lebron have decided that, with their financial expertise, they might start their own company to provide consulting services to individuals interested in leasing equipment. One form of organization they are considering is a Partnership, (organization). If they start a partnership, each individual plans to contribute P500,000 in cash.In addition, Kobe has used IBM computer that originally cost P30,700 which he intends to invest in the partnership. The computer has a present market value of P15,000. Although both Kobe and Lebron are financial wizards, they do not know how a partnership operates. As a result they have come to you for advice. Instructions:1 What are the major disadvantages of starting a partnership?2 What type of document is needed for a partnership, and what should this document contain?3 Both Kobe and Lebron plan to work full-time in the new partnership.They believe that net income or net loss should be shared equally. However, they are wondering how they can provide compensation to Kobe for his additional investment of the computer.What would you tell/(advice) them?4 Kobe is not sure how the computer equipment should be reported on his tax return. What would you tell him?5 As indicated above, Kobe and Lebron have worked together for a number of years. Kobe’s skills complement Lebron and vice versa. If one of them dies, it will be very difficult for the other to maintain the business not to mention the difficulty of paying the deceased partner’s estate for his partnership interest.What would you advise them to do?COMMUNICATION ACTIVITY You are an expert in the field of forming partnership. Stephen Curry and Dwayne Wade want to establish a partnership to start “Pasta Shop”, and they are going to meet with you to discuss their plans. Prior to the meeting you will send them a memo discussing the issues they need to consider before their visit. Instruction: 1 Write a memo in good form to be sent to Curry and Wade. {a-

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