Week 1

C15-1

A. Discuss why a partnership agreement may need features in addition to the income and loss-sharing ratio.

B. Discuss the arguments in favor of recording salary and bonus allowances to partners as expenses included in computing net income.

C. What are the arguments against recording salary and bonus allowances to partners as partnership expenses?

A. Describe the formation of the partnership, including the date of formation and the purpose for the limited partnership.

B. Who was the initial general partner? What was the general partner’s initial percentage interest in the partnership? And who was the general partner as of December 31, 2003?

C. What was the general partner’s profit percentage? What economic reasons might the general partner have had for investing in this partnership?

D. What were the major elements of the Restructuring Plan approved in 2001 by the limited partners?

1. What were the major elements of the Plan of Liquidation that      was initiated in 2003?

    

F. The partnership adopted the liquidation basis of accounting beginning on September 30, 2003. Briefly describe the liquidation basis of accounting the partnership used.

G. The partnership filed a form 15-12G on May 1, 2006. Obtain this filing. What is the purpose of this form that is required by the SEC?

H. Compare the partnership’s financial statements before and after the September 30, 2003 adoption of the liquidation basis of accounting.