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Susan and Erin operate a spa as partners and share profits and losses equally. Their business has been more successful than they expected and is
- Susan and Erin operate a spa as partners and share profits and losses equally. Their business has been more successful than they expected and is operating profitably. Erin works hard to maximize profits. She schedules appointments from 8 a.m. to 6 p.m. daily and she even works weekends. Susan schedules her appointments from 9 a.m. to 5 p.m. and does not work weekends. Susan regularly makes much larger withdrawals of cash than Erin does, but tells Erin not to worry. "I never make a withdrawal without you knowing about it”' she says to Erin, "so it's properly recorded in my drawings account and charged against my capital at the end of the year." To date, Susan's withdrawals are twice as much as Erin's. 1. Who are the stakeholders in this situation? 2. Identify the problems with Susan's actions. In what ways are they unethical? 3. What provisions could be put in the partnership agreement so that the differences in Susan's and Erin's work and withdrawal habits are no longer unfair to Erin?
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