General Widget partnership assets amount to $34,000 after liquidation.Frank,Gene,and Hank,equal partners,each contributed $3,000 into the capital pool at the inception of the business.Gene later loaned the business $5,000.They owe $23,000 to creditors for inventory.What will Gene get in distribution,assuming there is no agreement on the distribution of profits?
A) $7,000
B) $5,000
C) $8,000
D) $11,000

Question

Quizplus · Accepted Answer

Gene contributed $3,000 and loaned the business $5,000, for a total of $8,000. After paying off the creditors, there is $11,000 left. Gene is entitled to his $8,000 back, plus a share of the remaining $3,000. Since there are three partners, Gene's share of the remaining $3,000 is $1,000. Therefore, Gene will get a total of $8,000 + $1,000 = $9,000.

General Widget Partnership Assets Amount to $34,000 After Liquidation