12 in the purchase of partnership interest the

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12. In the purchase of partnership interest, the capital accounts of the exiting partner(s) will be reduced. 13. With a 100% purchase of the interest of a partner, a new partner has all the rights of the remaining partner(s) . 14. The capital of an existing partnership is P160,000 after Keith invested P40,000 in the partnership. Keith is entitled to 25% (1/4) of the income or loss of the partnership. 15. When the current value of the partnership is greater than the recorded amounts of equity, the bonus resulting from a purchase of interest is given to the old partner(s). 16. The withdrawal of a partner from a partnership may result in an increase in the capital accounts of the remaining partners. 17. There is more than one reason for giving a withdrawing partner assets of value greater than the withdrawing partner's recorded equity. 18. The death of a partner will require that all non-cash assets are sold for cash, all liabilities are paid, and remaining cash be distributed to the estate of the dead partner on the basis of the partnership income and loss agreement. 19. Partners will share gains and losses on liquidation in their capital investment ratio. 20. A capital deficiency occurs when a partner has insufficient equity to cover his or her share of losses resulting from liquidation. Let’s AnalyzeProblem 1 A.Can a husband and wife form a limited partnership to engage in real estate business, with the wife being a limited partner? B.Can two corporations organize a general partnership under the Civil Code of the Philippines?
87 C.Can a corporation and an individual form a general partnership? Problem 2 Conveyance of a Partner’s Share Dissolution (1998) Dielle, Karlo and Una are general partners in a merchandising firm. Having contributed equal amounts to the capital, they also agree on equal distribution of whatever net profit is realized per fiscal period. After two years of operation, however, Una conveys her whole interest in the partnership to Justine, without the knowledge and consent of Dielle and Karlo. 1. Is the partnership dissolved? 2. What are the rights of Justine, if any, should she desire to participate in the management of the partnership and in the distribution of a net profit of P360.000.00 which was realized after her purchase of Una’s interest? Problem 3 Dissolution of Partnership (1995)Pauline, Patricia and Priscilla formed a business partnership for the purpose of engaging in neon advertising for a term of five (5) years. Pauline subsequently assigned to Philip her interest in the partnership. When Patricia and Priscilla learned of the assignment, they decided to dissolve the partnership before the expiration of its term as they had an unproductive business relationship with Philip in the past. On the other hand, unaware of the move of Patricia and Priscilla but sensing their negative reaction to his acquisition of Pauline’s interest, Philip simultaneously petitioned for the dissolution of the partnership.

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