2: George and Jeena have been friends since college and have always wanted to start their own business. After graduation, George went on to work for a few years as a software developer while Jeena pursued a career in marketing. They decided to start a software development company together and agreed to be equal partners in the business. They each contributed $50,000 of their own savings to start the business, but they did not draft a formal partnership agreement outlining their roles and responsibilities or how they would split profits. The company started well and within the first year, they secured several clients and generated a revenue of $300,000. However, as the business grew, tensions began to arise between George and Jeena. George felt that he was doing more of the technical work, which generates more revenue for the firm while Jeena was focusing on sales and marketing. He also felt that Jeena was not contributing enough to the business and that he should receive a larger share of the profits. Jeena, on the other hand, felt that without marketing, the firm would not be got enough revenue but George was not valuing her contributions to the business and was not willing to listen to her ideas. She also felt that she deserved a larger share of the profits as she was bringing in the majority of the clients. To make matters worse, George decided to take out a loan of $50,000 to invest in the business without consulting Jeena. He expected that he will be paid interest from the profit of the firm. But Jeena has objected to giving interest to George. Jeena made her statement that, if George collects interest on the loan from the firm, she should get interest on capital for her contribution. As the business continued to grow, George and Jeena also disagreed on how to allocate the profits. George believed that they should reinvest the profits back into the business while Jeena wanted to take a larger portion of the profits in the form of drawings and a salary. 7 Eventually, the disagreements between George and Jeena led to a major dispute, and they decided to dissolve the partnership. However, they were unable to come to an agreement on how to split the profits and how to pay off the loan with interest. They also disagreed on how much interest should be paid on their initial contributions to the business. As a result, they were forced to seek legal help to settle the dispute and divide the assets of the business. You are required to: Assess/Discuss the elements of partnership law relevant to the accounting of a partnership business. You have to include the characteristics of the partnership, the importance of the partnership agreement, what are the consequences if there is no partnership agreement. Evaluate critically the given case study, relating to the above requirement. Also, demonstrate the difference between partnership and sole trader. While answering this part, you have to include the difference between a partnership and sole trader from a general and accounting point of view and the advantages, and disadvantages of having a partnership compared with a sole trader business connecting to the given case study. (Maximum 1500 words) (8 marks) 8