Part B
The partnership of Sampson, Klingon, Carton, and Romulan is being liquidated. It currently holds cash of $9,000 but no other assets. Liabilities amount to $24,000. The capital balances are as follows:
|
Sampson |
$9,000 |
|
Klingon |
17,000 |
|
Carton |
5,000 |
|
Romulan |
12,000 |
Profits and losses are allocated on the following basis: Sampson, 40 percent, Klingon, 20 percent, Carton, 30 percent, and Romulan, 10 percent.
a. If both Klingon and Romulan are personally insolvent, how much money must Carton contribute to this partnership?
b. If only Romulan is personally insolvent, how much money must Klingon contribute? How will these funds be disbursed?
c. If only Klingon is personally insolvent, how much money should Sampson receive from the liquidation?