James and John go into business together as partners.They each decide to make contributions to the business of the partnership.James has two vans worth $15 000,which he gives to the partnership.John owns an old farmhouse worth $60 000 that they decide can be used as a warehouse,and John gives it to the partnership.Five years later,there is a falling out and they decide to end the partnership.By this time the warehouse is worth $80 000 and the vans are worth $12 000.John will be entitled to $80 000 and James will be entitled to the depreciated value of the vans,namely $12 000.

Question

Quizplus · Accepted Answer

The statement is false. Based on the information given, James and John did not agree on how the profits and assets of the partnership would be divided if they were to end the partnership. Therefore, they would need to follow the legal procedures for dissolving a partnership, which usually involve selling off assets and dividing the profits based on the agreed-upon percentages or the amount that each partner contributed to the business. It is not accurate to say that John would automatically be entitled to the entire value of the warehouse and James would only be entitled to the depreciated value of the vans.

James and John Go into Business Together as Partners