Question
Paul, Frank and Basil formed a partnership 10 years ago and Paul is about to retire. Paul is not financially minded but he knows that
Paul, Frank and Basil formed a partnership 10 years ago and Paul is about to retire. Paul is not financially minded but he knows that he is entitled to one-third of partnership assets upon his retirement. Total 90 assets have a book value of P900,000 and Paul feels that he is entitled to his share. Frank and Basil are aware that the market value of the firm's net assets approximates P1,500,000. Frank and Basil plan to form a new partnership.
What are the financial and ethical and legal implications of distributing P300,000 to Paul upon his retirement?
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