Asked by Terry Valentine on May 26, 2024
Verified
Harry, Clyde, and Pete carried on business in partnership as hardware merchants. Clyde, who did most of the purchasing of stock for the partnership, would occasionally purchase (using his own money) an extra quantity of some items that could readily be sold to consumers. He would use the truck owned by the business on the weekends to travel to his cottage where he would sell the items to cottage owners in the area of his own cottage. Harry and Pete were unaware of Clyde's actions, as Clyde had not revealed his weekend business activity to either Harry or Pete. Harry and Pete are entitled to claim their share of the profits earned by Clyde from his weekend selling activity.
Weekend Selling Activity
Commercial operations that specifically occur on weekends, often relating to retail or leisure services aiming to capitalize on increased consumer availability.
Hardware Merchants
Businesses specialized in selling tools, building materials, and related goods often to consumers and other businesses.
Share of Profits
A portion of the profits generated by a business or investment that is distributed to its investors, partners, or shareholders.
- Recognize the impact of personal liabilities and actions of partners on the partnership and other partners.
Verified Answer
Learning Objectives
- Recognize the impact of personal liabilities and actions of partners on the partnership and other partners.
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