会原19版练习答案 Chapter_12_SM.docVIP

Chapter 12 Accounting for Partnerships QUESTIONS 1. Under the circumstances described, the death, bankruptcy, or legal inability of a partner to execute a contract ends a partnership. In addition, if a partnership is organized for the purpose of completing a specific business project, the partnership ends when the project is completed. If the business for which the partnership was organized cannot be completed, but goes on indefinitely, the partnership may be dissolved at the will of any one of its partners. 2. Mutual agency means that each partner is an agent of the partnership and can commit it to contracts that are within the normal scope of its business. 3. Yes, partners can limit the right of a partner. Such an agreement is binding on members of the partnership. It is also binding on outsiders who know of the agreement. However, it is not binding on outsiders who do not know of the agreement. 4. No, he does not have this right. A partnership is a voluntary association and partners have the right to select the people with whom they associate as partners. 5. If partners agree on the method of sharing incomes, but say nothing of losses, then any losses are shared in the same manner as income. 6. The allocation of net income to the partners is reported on the statement of partners equity. 7. Unlimited liability means that the creditors of a partnership have the right to require each partner to be personally responsible for all debts of the partnership. 8. All partners in a general partnership have unlimited liability. A limited partnership includes both general and limited partners, and the limited partners have no personal liability for partnership debts. Also, the general partners assume the management duties of the partnership. 9. Georges claim is not valid unless the previously agreed upon method of sharing net incomes and losses granted George an annual salary allowance of $25,000. Unless the partnership agreement says otherwise, partn