Alexandra and Kellie operate a beauty salon as partners who share profits and losses equally. The success of their business has exceeded their expectations; the salon is operating quite profitably. Kellie is anxious to maximize profits and schedules appointments from 8 a.m. to 6 p.m. daily, even sacrificing some lunch hours to accommodate regular customers. Alexandra schedules her appointments from 9 a.m. to 5 p.m. and takes long lunch hours. Alexandra regularly makessignificantly larger withdrawals of cash than Kellie does, but, she says, Kellie, you neednt worry, I never make a withdrawal without you knowing about it, so it is properly recorded in my drawing account and charged against my capital at the end of the year. Alexandras withdrawals to date are double Kellies.

Instructions

• (a)Who are the stakeholders in this situation?
• (b)Identify the problems with Alexandras actions and discuss the ethical considerations of her actions.
• (c)How might the partnership agreement be revised to accommodate the differences in Alexandras and Kellies work and withdrawal habits?