Reference no: EM132923752
Questions -
Q1. Carney, Pierce, Menton, and Hoehn are partners who share profit and losses on a 4:3:2:1 basis, respectively. They are beginning to liquidate the business. At the start of the process, capital balances are:
Carney, capital $80,000
Pierce, capital $33,000
Menton, capital $63,000
Hoehn, capital $26,000
Which of the following statements are true?
a. Carney will collect a portion of any available cash before Hoehn receives money.
b. Carney will be the last partner to receive any available cash.
c. The first available $8,000 will go to Hoehn.
d. The first available $11,000 will go to Menton.
Q2. A partnership is considering possible liquidation because one of the partners (Bell) is personally insolvent. Profits and losses are divided on a 4:3:2:1 basis, respectively. Capital balances at the current time are:
Bell, capital $88,500
Hardy, capital $80,000
Dennard, capital $19,000
Suddath, capital $95,000
Bell's creditors have filed a $36,000 claim against the partnership's assets. The partnership currently holds assets of $450,000 and liabilities of $167,500. If the assets can be sold for $265,000, what is the minimum amount that Bell's creditors would receive?
a. $14,500
b. $5,500
c. $7,300
d. $0