Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Joe, Mike and Judy, three independent sole proprietors, decided to pool their resources and form a general partnership. Joe contributed $15,000 in capital, Mike contributed

Joe, Mike and Judy, three independent sole proprietors, decided to pool their resources and form a general partnership. Joe contributed $15,000 in capital, Mike contributed $30,000 in equipment and Judy contributed $25,000 in cash and equipment. The partnership commenced business on September 1, 2018, but the parties did not sign a formal partnership agreement until October 15, 2018. In 2019, the partnership made $6,000 in profits. The partnership agreement is silent on how profits and losses are shared. The parties are now in dispute as to how profits and losses are to be shared. Which, if any, of the following statements is/are correct? And Why? (what principal apply)

a) The partners cannot provide for Special Allocations of gains & losses among partners. b) Mike, Joe and Judy will each receive $2,000 in profits.

c) Mike will receive twice as much of the profits as Joe will receive d) The partnership began its existence on October 15, 2018.

e) Two of the above are correct.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Public Law

Authors: Mark Elliott, Robert Thomas

4th Edition

0198836740, 978-0198836742

More Books

Students also viewed these Law questions

Question

How easy the information is to remember

Answered: 1 week ago

Question

The personal characteristics of the sender

Answered: 1 week ago

Question

The quality of the argumentation

Answered: 1 week ago