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7. If during the course of the partnership I decided to sell my partnership interest, would I be better to sell it to the partnership itself or one of the existing partners?

7. If during the course of the partnership I decided to sell my partnership interest, would I be better to sell it to the partnership itself or one of the existing partners?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Answer 7 only.

Exercise 2 (LO 3, 4, 8) Issues involving goodwill and the liquidation of a partner- ship. Your client has been asked to invest in a partnership which will develop a piece of real estate for commercial use. It is estimated that the development will occur over three years after which time the partnership will be liquidated. After reviewing selected historical and prospec- tive financial information, your client has asked you to provide answers to the following questions: 5. If I were to purchase a new office building for my existing company, would it be better to hold this office as a personal asset or set up a corporation that owns the office building given my possible investment in the partnership? 6. Would I be better off to loan the partnership a set amount of money as compared to contri- buting the money as a partner? 7. If during the course of the partnership I decided to sell my partnership interest, would I be better to sell it to the partnership itself or one of the existing partners? Draft a memo to your client regarding the above questions.
Transcribed Image Text:Exercise 2 (LO 3, 4, 8) Issues involving goodwill and the liquidation of a partner- ship. Your client has been asked to invest in a partnership which will develop a piece of real estate for commercial use. It is estimated that the development will occur over three years after which time the partnership will be liquidated. After reviewing selected historical and prospec- tive financial information, your client has asked you to provide answers to the following questions: 5. If I were to purchase a new office building for my existing company, would it be better to hold this office as a personal asset or set up a corporation that owns the office building given my possible investment in the partnership? 6. Would I be better off to loan the partnership a set amount of money as compared to contri- buting the money as a partner? 7. If during the course of the partnership I decided to sell my partnership interest, would I be better to sell it to the partnership itself or one of the existing partners? Draft a memo to your client regarding the above questions.
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