The capital balances, prior to the liquidation of the XYZ partnership, were as follows: X, Y, and Z share profits and losses in the ratio of 5:3:2. As a result of a loan, the partnership owes Y $80,000. Using the information above, which partner has the highest Loss Absorption Power (LAP) prior to liquidation?

Question

The capital balances, prior to the liquidation of the XYZ partnership, were as follows:  X, Y, and Z share profits and losses in the ratio of 5:3:2. As a result of a loan, the partnership owes Y $80,000. Using the information above, which partner has the highest Loss Absorption Power (LAP) prior to liquidation?

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The Answer of The capital balances, prior to the liquidation of the XYZ partnership, were as follows:  X, Y, and Z share profits and losses in the ratio of 5:3:2. As a result of a loan, the partnership owes Y $80,000. Using the information above, which partner has the highest Loss Absorption Power (LAP) prior to liquidation?

The Capital Balances, Prior to the Liquidation of the XYZ