Chapter 16, Problem 16.20P

a.

To determine

Introduction:

A partnership agreement is a formal written agreement between partners. It is recommended to have a formal written agreement to avoid the problems that may arise during the course of business. Each partner should sign the partnership agreement to indicate acceptance of its terms. A partnership agreement should include the following items:

1. Name of partnership and partners
2. Type of business to be conducted by the partnership
3. Initial capital contribution of each partner and method of future capital contributions
4. Manner of distribution of profit or loss, including salaries, interest on capital bonuses and limit of withdrawals
5. Procedure for changes in partnership such as the admission of new partners
6. Other aspects such as management and accounting methods to be used

If the given situations are permissible under partnership using, Y for Yes and N for No.

b

To determine

Introduction:

A partnership agreement is a formal written agreement between partners. It is recommended to have a formal written agreement to avoid the problems that may arise during the course of business. Each partner should sign the partnership agreement to indicate acceptance of its terms. A partnership agreement should include the following items:

1. Name of partnership and partners
2. Type of business to be conducted by the partnership
3. Initial capital contribution of each partner and method of future capital contributions
4. Manner of distribution of profit or loss, including salaries, interest on capital bonuses and limit of withdrawals
5. Procedure for changes in partnership such as the admission of new partners
6. Other aspects such as management and accounting methods to be used

If the given situations are permissible under partnership using, Y for Yes and N for No.