ASSIGNMENT
1.In 2007, Gauldin and Corn entered into a partnership for the purpose of raising cattle and hogs. The two men were to share equally all costs, labor, losses, and profits. The business was started on land owned initially by Corn’s parents but later acquired by Corn and his wife.
No rent was ever requested or paid for use of the land. Partnership funds were used to bulldoze and clear the and, to repair and build fences, and to seed and fertilize the land. In 2011, at a cost of $2,487.50, a machine shed was built on the land. In 2016, a Cargill unit was built on the land at a cost of $8,000. When the partnership dissolved in 2017, Gauldin paid Corn $7,500 for the “removable” assets; however, the two had no agreement regarding the distribution of the barn and the Cargill unit. Is Gauldin entitled to one-half of the value of the two buildings? Explain.
2. Anita and Duncan had been partners for many years in a mercantile business. Their relationship deteriorated to the point at which Anita threatened to bring an action for an accounting and dissolution of the firm. Duncan then offered to buy Anita’s interest in the partnership for $250,000. Anita refused the offer and told Duncan that she would take no less than $360,000. A short time later, James approached Duncan and informed him he had inside information that a proposed street change would greatly benefit the business and that he, James, would buy the entire business for $1 million or buy a one-half interest for $500,000. Duncan made a final offer of $350,000 to Anita for her interest. Anita accepted this offer, and the transaction was completed. Duncan then sold the one-half interest to James for $500,000. Several months later, Anita learned for the first time of the transaction between Duncan and James. What rights, if any, does Anita have against Duncan?
3. ABCD Company is a general partnership. It consists of Dianne, Greg, Knox, and Laura, whose capital contributions were as follows: Dianne ¼ $5,000, Greg ¼ $7,500, Knox ¼ $10,000, and Laura ¼ $5,000. The partnership agreement provided that the partnership would continue for three years and that no withdrawals of capital were to be made without the consent of all the partners. The agreement also provided that all advances would be entitled to interest at 10 percent per year. Six months after the partnership was formed, Dianne advanced $10,000 to the partnership. At the end of the first year, net prof- its totaled $11,000 before any moneys had been distributed to partners. Explain how the $11,000 should be allocated to Dianne, Greg, Knox, and Laura.
