. ABC partners have capital balances and share profit and loss equally: A=$20,000, B=$15,000 and C...

. ABC partners have capital balances and share profit and loss equally: A=$20,000, B=$15,000 and C = $65,000. During liquidation a $75,000 loss on non cash assets is suffered. How much will C eventually receive if:

A: All partners are solvent

B. B and C are solvent.

C. Only C is solvent. In this instance how much is C’s claim against A & B each?

Expert Solution

Answer

A.	All the partners are solvent
	If all the partners are solvent, the loss has to be shared by the partners equally

	The loss can be shared as follows

	$ 75000
	3	$ 25000

	So, Partner C will receive $ 40000 ($ 65000 - $25000)

B.	B and C are solvent
	If only B and C are solvent, the loss has to be first adjusted with partner A's Capital and the balance can be shared by B and C equally

	The loss can be shared as follows

	$ 75000 can be first adjusted with Partner A' Capital. That is,
	$ 55000 ($ 75000 - $ 20000)

	The balance $ 55000 can be equally shared by B and C

	$ 55000
	2	$ 27500

	So, Partner C will receive $ 37500 ($ 65000 - $27500)

C.	Only C is solvent
	If only C is solvent, the loss has to be first adjusted with partner A's Capital and B's Capital and the balance can be shared by C

	The loss can be shared as follows

	$ 75000 can be first adjusted with Partner A' Capital and B's Capital. That is,
	$ 40000 ($ 75000 - ($ 20000+$ 15000)

	The balance $ 40000 can be shared by C

	So, Partner C will receive $ 25000 ($ 65000 - $40000)

ekkarill92 answered 2 years ago

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