The Polen-James partnership is terminated when creditor claims exceed partnership assets by $40,000. James is a millionaire and Polen has no personal assets. Polen's partnership interest is 75% and James's is 25%. Creditors

Question

Quizplus · Accepted Answer

In a partnership, when the partnership assets are not enough to cover the creditor claims, the partners are personally liable for the remaining amount. Since Polen has no personal assets, the entire remaining amount of $40,000 must be collected from James, who is the only partner with personal assets. The fact that Polen had a 75% partnership interest is irrelevant in this case. Therefore, option B is the correct answer.

The Polen-James Partnership Is Terminated When Creditor Claims Exceed Partnership