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Exam 27: All Forms of Partnership

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Question 31

True/False

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Most states treat a partnership as an aggregate for most purposes.

A) True
B) False

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Question 32

Multiple Choice

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Natural Gas, LP, is a limited partnership to which its partners have contributed capital. Natural Gas's creditors include Precision Piping, Inc. On Natural Gas's dissolution, its assets will be distributed to pay

A) ​the partners and Precision Piping proportionately.
B) ​the partners before Precision Piping.
C) ​Precision Piping before the partners.
D) ​none of the choices.

E) B) and C)
F) A) and C)

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Question 33

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Fresco and Garcia form a partnership-HVAC Pros. Garcia's capital contribution is $10,000, and Fresco's is $15,000. The partnership agreement provides that profits are to be shared, with 40 percent for Garcia and 60 percent for Fresco. Later, Garcia makes a $10,000 loan to the partnership when it needs working capital. When the partnership is dissolved, its assets are $50,000, and its debts are $8,000. How should the assets be distributed?​

Gwen and Hugo do business as Gwen & Hugo Civil Engineers, a partnership. This firm is governed by the Uniform Partnership Act​

Smith & Jones, Accountants, is a limited liability partnership (LLP) . The major features of an LLP are that it limits the personal liability of the partners and​

Luke and Maya form Northeast Air Express, a general partnership. The essential elements of this partnership do not include

In a general partnership, the acts of one partner in the ordinary course of business do not subject the other partners to personal liability.

Sebastian was the manager of Thai Bistro, a restaurant specializing in Southeast Asian foods. Sebastian opened a bank account in Thai Bistro's name, signing the account signature card as "owner." Umeko, who was often at Thai Bistro and had free access to its office, told others that she was "an owner" and "a partner." She also opened a bank account in Thai Bistro's name, and signed the account signature card as "owner." Sebastian told Vijay, the owner of Wong Noodles, Inc., that Umeko was a member of a partnership that owned Thai Bistro. On this basis, Wong Noodles delivered its goods to Thai Bistro on credit. In fact, Thai Bistro was owned by a corporation. When the unpaid account totaled more than $10,000, Wong Noodles filed a suit against Umeko to collect. On what basis might Umeko be liable for the debt?

Craig, Donna, and Eve do business as FastTrak Career Consultants. Eve's relationship to FasTrak ends, but the firm continues to do business. This is​

A majority of the states treat a partnership as an entity for most purposes.

A partner has a duty to devote time, skill and energy on behalf of the partnership business.

Generally, each state limits the liability of partners in a limited liability partnership in some way.

Oliana is a partner in Pacific Traders. In the majority of states, with respect to any partnership obligations that Oliana does not participate in, know about, or ratify, Oliana would be liable for​

Chet is a partner in Diligent Accounting Service. Chet can inspect Diligent's books and records​

Brad and Carolyn are partners in Doctors for Children, a medical clinic. Brad's dissociation from the firm results in

Cherry Creek Development, LP, is a limited partnership that invests in residential real estate projects. Its limited partners include more than 150 sophisticated investors and investment professionals. A Cherry Creek limited partner loses his or her limited liability if he or she​

Nora and Owen do business as Profit & Property, a real estate investment partnership. In acting on the firm's behalf in a deal with Quaint Village Mall, Nora takes advantage of an opportunity to make a secret profit on her own behalf. To her firm, Nora is liable for​

Emily is one of three partners in Fast Work, a commercial janitorial service. With respect to Emily's interest in the firm, when she dies, her heirs are most likely entitled to​

The intent to associate is a key element of a partnership.

A partner's devoting time, energy, and skill to partnership business is a compensable service.