Bowen and Campbell are partners in operating a store. Without consulting Bowen, Campbell enters into a contract for the purchase of merchandise for the store. Bowen contends that he did not authorize the order and refuses to take delivery. The vendor sues the partners for the contract price of the merchandise. Will the partnership have to pay? Why? Does your answer differ if Bowen and Campbell are partners in a public accounting firm?
Answer to relevant QuestionsLen Peters and Beau Silver form a partnership to operate a catering business. Peters invests $20,000 cash and Silver invests $30,000 cash on March 1, 2014. Prepare the journal entry to record the formation of the partnership.On March 12, 2014, Fontaine agrees to pay Ramos and Briley $12,000 each for a one-third interest in the existing Ramos–Briley partnership. At the time Fontaine is admitted, each partner has a $30,000 capital balance. ...Assume the same information as in QS 12-14 except that the Equipment was sold for $85,000 on April 1, 2014. Prepare the journal entry to record the final distribution ofcash.The partners in the Magesty Partnership have agreed that partner Prince may sell his $140,000 equity in the partnership to Queen, for which Queen will pay Prince $110,000. Present the partnership’s journal entry to record ...Jenkins, Willis, and Trent invested $200,000, $350,000, and $450,000, respectively, in a partnership. During its first year, the firm recorded net income of $600,000.Required Prepare entries to close the firm’s Income ...
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