Exam 38: Operation of Partnerships and Related Forms

Together,express and implied authority constitute _____.

Helen and Casey are partners.Helen contributes capital of $20,000 to the partnership and Casey contributes $10,000.They agree that Helen will receive 60 percent of all profits and that Casey will receive 40 percent.They have not decided how to share losses.The partnership makes a loss of $7,000.What is Casey's share of the loss?

In a partnership,are partners liable for the crimes committed by another partner? Explain.

A partnership does not have the authority to ratify the unauthorized act of partners.

Sharon and Martha are general partners in the SM general partnership.Sharon,acting with authority,negotiated and signed for a $500,000 loan to SM from a bank.SM has not repaid this loan.The bank can recover its loan from:

In a partnership,each partner has limited personal liability to partnership creditors.

What document gives authority to a managing partner to run the business?

Stella,Bob,and Chris are partners in Sole Services,a general partnership that runs a small shoe store.Stella and Bob want to buy the building that they are currently renting,but Chris does not agree.How will this disagreement be resolved?

In the absence of a specific provision in a general partnership agreement,partnership losses will be allocated:

When partners disagree concerning an action to be taken in the ordinary course of business,the disagreement will be resolved only if all the partners agree.

A partner in a trading partnership ordinarily has implied authority to borrow money for the partnership.

Partners are not liable to their partnership for losses resulting from:

Morgan is a silent partner at Mathers & Sons,a general partnership.Because he is only a silent partner,he does not have:

Which of the following partnerships can be classified as nontrading partnership engaged in providing services?

_____ authority exists because it seems reasonable to a third party that a partner has authority to do an act.

Vernon and Josh are partners in an accounting firm.They agree that only Josh has authority to make contracts to perform audits of clients,an agreement known by Mantron Company.Nonetheless,Vernon and Mantron contract for the partnership to audit Mantron's financial statements.Vernon takes the contract to Josh,who reads it and says,"OK,we can perform the audit." In this situation,Josh has _____ the contract.

A partnership and its partners are usually liable for a partner's intentional torts.

Shawnequa is a partner of Cost Hydrohut LLP,an accounting limited liability partnership.One of Shawnequa's partners negligently audits a client,with the result that a bank that relied on the client's audited financial statements suffers damages when the client fails to repay the loan.The bank sues Cost Hydrohut,but its assets are insufficient to pay the entire damages.Will the bank be able to collect the remaining damages from Shawnequa's personal assets?

Frazier and Roz are partners.Frazier contributes $30,000 to the partnership,and Roz contributes $10,000.They agree that Frazier will assume 70 percent of partnership losses and that Roz will assume 30 percent.They make no agreement about how to share profits.The partnership has a profit of $60,000 in its first year.How much of the profits is Frazier entitled to receive?

Jim and Sarah establish a partnership business.Sarah ends up doing all the work related to the business even though they had agreed to split the labor.Jim may be in breach of his duty to what?