CASE 3 A Problem of Sudden Termination profitable, the two partners had to way it als the boss started and to cope with rapid On January 31, 28, the bola equity st estimated to be in the neighborhood of 100000 On February 1 Nashi is killed an wonder, Lay be of the deceased infurm Iwako that Nalan's death egy s ship Further, the family is taking the lepo share of the worth of the bu Iwank in fully aware that he will his own future to think about. I hope in The with the hex whe ness because it has proven to be profitably WASKO AND NASHIMO BALANCE SHEET JANUARY 31.20- ASSETS Current Arts 13 Accounts Receivable) Merchandise Inventory 430 Prepaid Insurance 13072 125 000 415 1432 $140357 Land Building Supplies Pure and Equipment Furniture and Equipment $35000 $145 000 Less Accumulated Depreciation 32 075 112 925 $ 72.000 Less Accumulated Depreciation 48456 23544 Automobles $22473 Less Accumulated Depreciation 15903 570 178 039 $318 396 LIABILITIES AND PARTNERS EQUITY Current Liabilities Accounts Payable Bank Loan $112 500 50 000 Mortgage Payable $162 500 65400 Partners' Equity R. Iwasko, Capital G. Nashimo Capital $45 248 45248 90 496 $318 396 Questions 1. What does partnership law state regarding the death of a partner? 2. What is Nashimo's equity in the business? 3. What is the estimated worth of the business? 4. How much should Nashimo's family get out of the business? 5. What problem does this present for Iwanko? 6. What would be the most straightforward way for Iwasko to resolve the problem suggested in 5 above? 7. Give one undesirable aspect and one desirable aspect of this course of action a. Suggest an alternative course of action, one involving participation in the busi ness by Nashimo's family. Give an undesirable aspect of this course of action 9. What must happen if Iwasko can neither borrow money nor make a deal with Nashimo's family? 10. What additional hardship would this involve? 11. How could insurance be used to avoid difficulties of sudden termination?