ACTIVITY [BUSINESS LAW (PRIVATE ORGANIZATIONS)]

ACTIVITY CHAPTER 4

Directions: Read and answer each question carefully.

Note: Copying answers directly from your classmates or from any book and sites
from the internet will automatically get 0 points.

1. Partnership Assets and Liabilities are as follows:

December 31, 2020 December 31, 2022
Assets P 200,000 P 50,000
Liabilities 100,000 200,000
Capital:
A – P 50,000: B – P 50,000 P 100,000 P 150,000

A and B general partners, have fully paid their capital contributions. What is the
remedy of creditor C?

Answer: Since A and B are both partner, the creditor can collect their liability
from their capital, it is insufficient he can includes their personal asset
because one of the disadvantage of partnership compared to corporation is that
partners are liable beyond to their investment, means that creditor can go after to
them if the partnership is unable to pays their debt unless it is limited partnership
but most partnership are general partnership.

2. A is the managing partner of A and B Company. X is indebted to A for P20,000 and

to the partnership for P60,000. When both debts mature, X pays A for P20,000 and
the latter issues a receipt for his personal credit. The payment for P20,000 shall be
applied.

Answer: Since it is personal liability of X to A, it is mean that the amount of

P20,000.00 paid by X will be full applied to A.

3. A and B formed the limited partnership with A as general partner, B as limited

partner and C as industrial partner. A and B contributed P50,000 each. The
partnership failed and after disposing all its assets to pay partnership debts there
still remains a note payable in the sum of P30, 000?

Answer: Since B is a limited partner, where B is only liable up to the amount of his
investment then A, the general partner and C, as industrial partner shall need to
 spill up the remaining amount they need to pay P30,000.00. Therefore, both A and
C liable to contribute P15,000.00 each to pay the remaining debt.

4. X, Y and Z are partners and contributed to the partnership P40,000, P30,000 and
services, respectively. The partnership was later liquidated and after payment of the
partnership indebtedness, only P20,000 worth of assets remained. How much is the
share of Z?

Answer: Zero, because Z is the industrial partner in the partnership, where his
contribution in the partnership is his only expertise or profession (service).

5. A, B and C are equal partners in X Partnership. On April 29, 2020, partner C died.
Not knowing that C died, on May 1, 2020, A contracted a liability to D who also
does not know the death of C, the liability is P90,000. After D exhausted the net
assets of X Partnership in the amount of P60,000 he can collect.

Answer: X can collect to the partnership P10,000.00 each, total of P30,000.00, but
since C died they will collect it from his property left.