Garbage
PARTNERSHIP AGREEMENT
A business case
Presented to the
Accountancy Department
De La Salle University
In partial fulfillment
Of the course requirements in ACTPACO 35
Fucoy, Regina Rae F.
10 July 2013 1. Discuss whether Reyes is acting in an ethical manner.
Reyes stating that “an agreement is an agreement” is true, however, in a partnership, a partner should make an effort to make sure that everyone is to divide equally the profit and losses. According to my PARTCOR class if a partner does not extend extra effort to save the partnership, he can even be evicted. Reyes should have been willing to help Luke with his problem to show that he is really interested to make the partnership successful. Reyes’ unwillingness to help Luke did not make look ethical.
2. How could Luke renegotiate the partnership agreement to avoid dispute?
How Luke approached Reyes is already ethical but maybe he could make it better if he approached Reyes more formally or more business-like. Both of them should also control their emotions when talking about these kinds of issues especially when they find themselves not agreeing with each other. Luke should mention that he just wants to receive what he deserves to get from the partnership. Knowing that Reyes is successful with his side of the partnership, Reyes should be willing to help or at least give Luke advice on how to be successful as he is. Both of them should work together because that is what a partnership is all about.
How would you advise the partners in developing a method for dividing income?
According to Hector De Leon, in an absence of a stipulation the partners should divide their profit and losses according to the capital contribution. Since Dantes contributed more, he should receive more in their P/L ratio. Perez, on the other hand, contributes more on services. The additional shares that he would receive will not be that big. De Leon also stated that an industrial partner shall only receive
A business case
Presented to the
Accountancy Department
De La Salle University
In partial fulfillment
Of the course requirements in ACTPACO 35
Fucoy, Regina Rae F.
10 July 2013 1. Discuss whether Reyes is acting in an ethical manner.
Reyes stating that “an agreement is an agreement” is true, however, in a partnership, a partner should make an effort to make sure that everyone is to divide equally the profit and losses. According to my PARTCOR class if a partner does not extend extra effort to save the partnership, he can even be evicted. Reyes should have been willing to help Luke with his problem to show that he is really interested to make the partnership successful. Reyes’ unwillingness to help Luke did not make look ethical.
2. How could Luke renegotiate the partnership agreement to avoid dispute?
How Luke approached Reyes is already ethical but maybe he could make it better if he approached Reyes more formally or more business-like. Both of them should also control their emotions when talking about these kinds of issues especially when they find themselves not agreeing with each other. Luke should mention that he just wants to receive what he deserves to get from the partnership. Knowing that Reyes is successful with his side of the partnership, Reyes should be willing to help or at least give Luke advice on how to be successful as he is. Both of them should work together because that is what a partnership is all about.
How would you advise the partners in developing a method for dividing income?
According to Hector De Leon, in an absence of a stipulation the partners should divide their profit and losses according to the capital contribution. Since Dantes contributed more, he should receive more in their P/L ratio. Perez, on the other hand, contributes more on services. The additional shares that he would receive will not be that big. De Leon also stated that an industrial partner shall only receive