Adams, a consulting architect, entered into a partnership with 3 others for the practice of their profession. The only written partnership agreement is a brief document specifying that Adams is entitled to 55% of the profits and the others to 15% each. The venture is a total failure. Creditors are pressing for payment, and some have filed suit. The partners cannot agree on a course of action. What percentage of the partners must agree to achieve each of the following objectives and explain the reason for your answers? (a) To add Jones, registered architect, as a partner, Jones being willing to contribute a substantial amount of much needed new capital. (b) To sell a vacant lot held in the partnership name, which had been acquired as a future office site for the partnership. (c) To move the partnership's offices to less expensive quarters. (d) To demand an accounting. (e) To dissolve the partnership. (f) To agree to submit certain disputed claims to arbitration, which Adams believes will prove to be less expensive than litigation. (g) To sell all of the partnership's personal property, with Adams having what he believes to be a good offer for the property from a newly formed architectural firm. (h) To alter the respective interests of the parties in the profits and losses by decreasing Adams' share to 40% and increasing the others' shares accordingly.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Adams, a consulting architect, entered into a partnership with 3 others for the practice of their profession. The only written partnership agreement is a brief document specifying that Adams is entitled to 55% of the profits and the others to 15% each. The venture is a total failure. Creditors are pressing for payment, and some have filed suit. The partners cannot agree on a course of action.

What percentage of the partners must agree to achieve each of the following objectives and explain the reason for your answers?

(a) To add Jones, registered architect, as a partner, Jones being willing to contribute a substantial amount of much needed new capital.

(b) To sell a vacant lot held in the partnership name, which had been acquired as a future office site for the partnership.

(d) To demand an accounting.

(e) To dissolve the partnership.

(f) To agree to submit certain disputed claims to arbitration, which Adams believes will prove to be less expensive than litigation.

(g) To sell all of the partnership's personal property, with Adams having what he believes to be a good offer for the property from a newly formed architectural firm.

(h) To alter the respective interests of the parties in the profits and losses by decreasing Adams' share to 40% and increasing the others' shares accordingly.

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions