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