Joe, Harry, and Sam Opened Up a Partnership Supplying Accounting

question 189

Essay

Joe, Harry, and Sam opened up a partnership supplying accounting services to the general public in a small town. Harry and his wife, unknown to Joe and Sam, also carried on a mail-order business at night that had nothing to do with accounting. Harry would, however, often come into the partnership office to use the photocopier and computer for correspondence related to his mail-order business. Joe and Sam found out about this activity when Harry forgot to take some papers away from the photocopier one night. Explain Harry's legal position.

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Definitions:

Accumulated Depreciation

The total depreciation for a fixed asset that has been charged to expense since that asset was acquired and made available for use.

Cash Price

The price of an item for immediate payment, as opposed to a higher price when paying on credit.

Productivity

A measure of efficiency, typically defined as the output of goods or services produced per unit of input, such as labor or capital.

Salvage Value

The forecasted remaining worth of an asset after its period of functionality has ended.