Question

1. Helen, Ann, and George form a partnership. Helen contributed $10,000; Ann contributed $5,000; and George contributed his time and skills. A partnership agreement was created but it does not say anything about the division of profits.  The partnership was dissolved and the partnership assets were sold for a loss of $8,000. After the payment of all debts the net amount was $6,000. Assume that each partner did not contribute any additional funds beyond what is provided in the facts, Ann contends that the distribution of profits should be $4,000 to Helen and $2,000 to Ann. George contends that the distribution of profits should be divided equally among the partners. Who is correct? Please briefly explain.
2. Mike, Peter, and Aaron formed a partnership in the State of Mercy to distribute alcoholic beverages. Their partnership agreement provided that the partnership would continue until December 31, 2020. Which of the following events would cause their partnership to dissolve? If so when their partnership will dissolve? Please briefly explain.
   1. Peter assigns his interest in the partnership to Bobby on May 31, 2016.
   2. Mike dies on April 1, 2016.
   3. George withdraws from the partnership on November 30, 2016.
   4. In 2016, the legislature in the State of Mercy passed a statute to make the sale or distribution of any alcoholic beverages illegal.
   5. Aaron filed for bankruptcy on April 1, 2016.  

Answer 1

In the case of Helen ,Ann and George, George is right.Profit should be divided equally because Partnership Act clearly points out that ,if nothing is mentioned in partnership Deed about the profit sharing ratio,then profit should be Divided equally among the partners

The death of Mike on April 1 2016 will lead to the dissolution of Partnership firm because the Partnership Act says that the death of any one of the partners would Lead to the dissolution of the firm.All other causes also leads to the dissolution of the firm but here,the death of Mike occurs first