Jim, Rob and Emily are partners in a consulting business. Jim's initial contribution was $30,000, Rob's was $20,000 and Emily's was $10,000. The partnership also borrows $60,000 from Vancouver Credit Union. The partners agree that profits and losses will be shared in proportion to their capital contributions. The business fails. Jim pays the entire $60,000 debt to the Vancouver Credit Union. How much can he collect from Rob?

Question

Quizplus · Accepted Answer

Jim can collect $20,000 from Rob. The total capital contribution is $60,000 (Jim's $30,000 + Rob's $20,000 + Emily's $10,000), and they agreed to share profits and losses in proportion to their contributions. Therefore, Rob's share of the debt is 1/3 of $60,000, which is $20,000.

Jim, Rob and Emily Are Partners in a Consulting Business