Mumtaz, Badia and Ilya are partners in a business partnership, called MBI. Mumtaz contributes $15,000 to the business, Badia contributes $10,000 and Ilya contributes $5,000. The partners agree among themselves that they will share partnership profits and losses in proportion to their contributions. In addition, the partnership borrows $30,000 from the bank. The business doesn't work out, and MBI is unable to repay the loan. Mumtaz pays the bank $30,000. How much can she recover from Ilya?

Question

Quizplus · Accepted Answer

Mumtaz can recover $5,000 from Ilya because the partners agreed to share profits and losses in proportion to their contributions. Ilya contributed 1/6 of the total capital, so he is responsible for 1/6 of the loss, which is $5,000.

Mumtaz, Badia and Ilya Are Partners in a Business Partnership