You have been given the assignment to read Beer School: Bottling Success at The Brooklyn Brewery. Upon completion of reading this informative book dealing with this real life rags to riches entrepreneurial….
Why is the partnership form of business organization sometimes preferred over the corporation or the sole proprietorship form?
Select three of the following questions for your initial response. Copy and paste the questions you decide to answer in bold type. It is a good idea to select questions to which you do not know the answer or would like to understand better. Also, be bold and answer a question you have not seen a classmate answered yet.
- Why is the partnership form of business organization sometimes preferred over the corporation or the sole proprietorship form?
- Does a partner leaving a partnership require the partnership to dissolve and wind up its business? Explain how the partnership may purchase the disassociated partner’s interest in the partnership.
- Present the arguments for and against the bonus method of admission of recognizing the admission of a new partner
- The Jones Partnership agreement includes a provision for distribution of partnership interest on capital balances. Unfortunately, the provision does not state the specific capital balance to be used in computing the profit share. What choices of capital balances are available to the partners? What is the preferred capital balance to be used in an interest allocation? Why?
- Under what circumstances would a partner’s capital account have a debit, or a deficiency, balance? How is the deficiency normally eliminated?
- Assume that because of a new law recently passed, the types of significant transactions in which the partnership engages are no longer lawful. Two of the five partners wish to wind up and terminate the partnership. Can these two partners require the partnership to terminate? Explain in detail.
- What are the major causes of the dissolution of a partnership? Explain the accounting implications of a dissolution.
- A, B, and C are partners. The partnership is liquidating, and Partner C is personally insolvent. What implications may this have for Partners A and B?
- The installment liquidation process uses a worst-case assumption in computing the payments to partners. What does the worst-case assumption mean?
- Contrast a lump-sum liquidation of a partnership with an installment liquidation of a partnership.
Include in bold type in your initial response the above question(s) you are answering.