Claudia invested $50,000 cash in the C&S General Partnership and received a 20% interest.The partnership borrowed $200,000 of full recourse debt from a local bank.Assuming that Claudia is personally liable for $40,000 if the partnership defaults on the loan,what is Claudia's at-risk amount before considering any partnership income or loss?

Question

Quizplus · Accepted Answer

Claudia's at-risk amount is the total amount that she could potentially lose in the partnership, which includes her initial investment and any personal liability for partnership debts. Therefore, the calculation would be: 
$50,000 (initial investment) + $40,000 (potential personal liability) = $90,000 (at-risk amount). Choice D is the only option that correctly calculates this amount.

Claudia Invested $50,000 Cash in the C&S General Partnership and Received