1. The owner of an accounting practice is considering establishing a partnership with two other persons to...
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2. Your employer is planning to form a partnership with one of his close friends. He explains to you that because he is well acquainted with the prospective partner, there is no need to have a written partnership agreement. He asks your advice. Give him your recommendation and the reasons for it.
3. Your employer is considering investing $50,000 in a partnership. In discussing the advantages and disadvantages of the arrangement, the employer informs you that a friend has told him that his potential loss is limited to the amount invested, $50,000. Is his information regarding this arrangement correct?
4. Two individuals who are forming a partnership ask you how they should divide the income and losses of the business. What factors should you consider in making a recommendation?
5. You work for a partnership. The partnership agreement between the two partners specifies that one partner is allowed a monthly draw of $3,000 and the other a monthly draw of $2,000. The agreement does not mention salary allowances for the partners. At the end of the year, one partner maintains that a drawing is the same as a salary allowance. They ask your opinion. What do you tell them?
6. One of the partners in a partnership that employs you is retiring from the business. Her capital account has a balance of $256,000. She tells you that she expects to receive a check for $256,000 from the partnership. Explain to her the proper procedure for determining the amount she will be paid.
Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
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Related Book For
College Accounting Chapters 1-30
ISBN: 978-0077862398
14th edition
Authors: John Price, M. David Haddock, Michael Farina
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