Ethical Case Study
Case Summary:
Dr. B and Dr. R are sole owners of two medical practices that operate in the same medical building. The two doctors agree to combine assets and liabilities of the two businesses to form a
To discuss: If Dr. R is acting in ethical manner and how Dr. B can renegotiate the partnership agreement to avoid the dispute?
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Accounting
- Salem and Durham entered into a partnership to provide supply chain management and logistic services in the Silicon Valley region of California. In their agreed Articles of Partnership, the partners acknowledged the following: Sharing of profits and losses: Compensate each partner $125 per hour for their billable hourly consulting work performed. Salem receives an additional $3,000 monthly as the partnership’s Chief Operating Officer (COO); Durham receives an additional $2,500 monthly as the partnership’s Chief Technology Officer (CTO), Any remaining profits or losses are divided equally between the partners. Each partner is permitted but not required to withdraw no more than $800 per month from the partnership and such withdrawals will be accounted for as direct reductions of the withdrawing partner’s capital balance. They will begin their partnership with equal beginning capital balances. On January 1, 20x1, when they formed the partnership, each partners’…arrow_forwardSalem and Durham entered into a partnership to provide supply chain management and logistic services in the Silicon Valley region of California. In their agreed Articles of Partnership, the partners acknowledged the following: Sharing of profits and losses: Compensate each partner $125 per hour for their billable hourly consulting work performed. Salem receives an additional $3,000 monthly as the partnership’s Chief Operating Officer (COO); Durham receives an additional $2,500 monthly as the partnership’s Chief Technology Officer (CTO), Any remaining profits or losses are divided equally between the partners. Each partner is permitted but not required to withdraw no more than $800 per month from the partnership and such withdrawals will be accounted for as direct reductions of the withdrawing partner’s capital balance. They will begin their partnership with equal beginning capital balances. On January 1, 20x1, when they formed the partnership, each partners’…arrow_forwardSalem and Durham entered into a partnership to provide supply chain management and logistic services in the Silicon Valley region of California. In their agreed Articles of Partnership, the partners acknowledged the following: Sharing of profits and losses: Compensate each partner $125 per hour for their billable hourly consulting work performed. Salem receives an additional $3,000 monthly as the partnership’s Chief Operating Officer (COO); Durham receives an additional $2,500 monthly as the partnership’s Chief Technology Officer (CTO), Any remaining profits or losses are divided equally between the partners. Each partner is permitted but not required to withdraw no more than $800 per month from the partnership and such withdrawals will be accounted for as direct reductions of the withdrawing partner’s capital balance. They will begin their partnership with equal beginning capital balances. On January 1, 20x1, when they formed the partnership, each partners’…arrow_forward
- lemon and salt entered into a partnership to provide supply chain management and logistic services in the san francisco region of California. In their agreed Articles of Partnership, the partners acknowledged the following: Sharing of profits and losses: Compensate each partner $125 per hour for their billable hourly consulting work performed. lemon receives an additional $3,000 monthly as the partnership’s Chief Operating Officer (COO); salt receives an additional $2,500 monthly as the partnership’s Chief Technology Officer (CTO), Any remaining profits or losses are divided equally between the partners. Each partner is permitted but not required to withdraw no more than $800 per month from the partnership and such withdrawals will be accounted for as direct reductions of the withdrawing partner’s capital balance They will begin their partnership with equal beginning capital balances. On January 1, 20x1, when they formed the partnership, each partners’ contributions were as…arrow_forwardlemon and salt entered into a partnership to provide supply chain management and logistic services in the san francisco region of California. In their agreed Articles of Partnership, the partners acknowledged the following: Sharing of profits and losses: Compensate each partner $125 per hour for their billable hourly consulting work performed. lemon receives an additional $3,000 monthly as the partnership’s Chief Operating Officer (COO); salt receives an additional $2,500 monthly as the partnership’s Chief Technology Officer (CTO), Any remaining profits or losses are divided equally between the partners. Each partner is permitted but not required to withdraw no more than $800 per month from the partnership and such withdrawals will be accounted for as direct reductions of the withdrawing partner’s capital balance They will begin their partnership with equal beginning capital balances. On January 1, 20x1, when they formed the partnership, each partners’ contributions were as…arrow_forwardJim Bond, a plumber, has been working for Fleming’s Plumbing Supplies for several years. Based on his hard work and the fact that he recently married Ivan Fleming’s daughter, Jim has been invited to enter into a partnership with Fleming. The new partnership will be called Fleming and Bond’s Plumbing Supplies. The terms of the partnership are as follows: a) Fleming will invest the assets of Fleming’s Plumbing Supplies, and the partnership will assume all liabilities. The market values of the office and store equipment are estimated to be $18,000 and $8,000, respectively. All other values reported on the balance sheet are reasonable approximations of market values. Fleming has no knowledge of any uncollectible accounts receivable. b) Bond will invest $50,000 cash. c) Fleming will draw a salary allowance of $50,000 per year, and Bond will receive $30,000. d) Each partner will receive 10% interest on the January 1 balance of his capital account. e) Profits or losses remaining after…arrow_forward
- I did parts 1,2(on the excel it is shown as a b c ) already, and have attached them.. i need help with 3 and 4.. lemon and salt entered into a partnership to provide supply chain management and logistic services in the san francisco region of California. In their agreed Articles of Partnership, the partners acknowledged the following: Sharing of profits and losses: Compensate each partner $125 per hour for their billable hourly consulting work performed. lemon receives an additional $3,000 monthly as the partnership’s Chief Operating Officer (COO); salt receives an additional $2,500 monthly as the partnership’s Chief Technology Officer (CTO), Any remaining profits or losses are divided equally between the partners. Each partner is permitted but not required to withdraw no more than $800 per month from the partnership and such withdrawals will be accounted for as direct reductions of the withdrawing partner’s capital balance They will begin their partnership with equal…arrow_forwardJim Bond, a plumber, has been working for Fleming’s Plumbing Supplies for several years. Based on his hard work and the fact that he recently married Ivan Fleming’s daughter, Jim has been invited to enter into a partnership with Fleming. The new partnership will be called Fleming and Bond’s Plumbing Supplies. The terms of the partnership are as follows: (a) Fleming will invest the assets of Fleming’s Plumbing Supplies, and thepartnership will assume all liabilities. The market values of the office and store equipment are estimated to be $18,000 and $8,000, respectively. All other values reported on the balance sheet (shown below) are reasonable approximations of market values. Fleming has no knowledge of any uncollectible accounts receivable.(b) Bond will invest $50,000 cash.(c) Fleming will draw a salary allowance of $50,000 per year, and Bond willreceive $30,000.(d) Each partner will receive 10% interest on the January 1 balance of his capital account.(e) Profits or losses remaining…arrow_forwardNancy Freeley has been operating an apartment-locator service as a sole proprietorship. She and Melissa Marcellus have decided to form a partnership. Freeley's contribution consists of Cash, $6,000; Accounts Receivable, $12,000; Furniture, $13,000; Building (net), $53,000; and Notes Payable, $17,000. To determine Freeley's equity in the partnership, she and Marcellus hire an independent appraiser. The appraiser values all the assets and liabilities at their book value, except the building, which has a current market value of $100,000. Also, there are additional Accounts Payable of $3,000 that Freeley will contribute. Marcellus will contribute cash equal to Freeley's equity in the partnership. Requirements 1. Journalize the entry on the partnership books to record Freeley's contribution. 2. Journalize the entry on the partnership books to record Marcellus's contribution.arrow_forward
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