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Problem 1: Which among the following partners would get the first cash distribution?
a. The partner with the largest loan balance
b. The partner with the largest loss absorption potential
c. The partner with the largest capital balance
d. The partner with the largest profit and loss ratio
Problem 2: If a partner fails to invest additional assets to make up his deficit, how should the debit balance be handled by the partners?
a. It should be written off as a regular bad debt expense
b. It should be allocated to all the partners in their profit and loss ratio
c. It should be distributed to the remaining partners in their remaining profit and loss ratio
d. None of the above
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