The ability of a partner to enter into a contract on behalf of all partners is c

Question

The ability of a partner to enter into a contract on behalf of all partners is called a. voluntary agency b. mutual agency. c. unlimited liability d. voluntary association. 37. Which of the following does not result in dissolution of a partnership? a. b. Sale of partnership assets c. e. 38. Admission of a new partner Death of a partner Bankruptcy of a partner 39. Jerry and Rose have agreed to form a partnership. Accordingly, Rose will invest $40,000 worth of equipment which has a note payable of $15, 000 which the partnership assumes, and Jerry will invest $40,000 in cash. The Rose's capital account balance will be. A. $40,000 B. $25,000 C. $15,000 D. $80,000

Explanation / Answer

Q37. Answer is b. Mutual Agency.

Q38. Answer is b. sale of partnership assets.

Explanation: There will be dissolution of partnership when there will be change in constitution of partnership firm like new partner admitted, retirement of partner adn bankruptey of partner. However, with the sale of assets, there will not be any change in constitution of partnershio. Hence, no dissolution of partnership.

Q39. Answer is b. $25,000

Explanation:

Value of equipment brought in:                               $40,000

Less: Liabilities of Note payable assumed by firm: $15,000

Capital brought in by Rose:                                     $25,000

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