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Dunn and Brad Partnership Is Considered Insolvent and Has Liabilities

Question 24

Multiple Choice

Dunn and Brad partnership is considered insolvent and has liabilities of $10,000.Here is a snapshot of the general ledger:
 Dunn  Brad  Personal Assets $40,000$16,000 Personal Liabilities $16,000$20,000 Partners Capital $20,000($10,000) \begin{array} { | l | l | l | } \hline & \text { Dunn } & \text { Brad } \\\hline \text { Personal Assets } & \$ 40,000 & \$ 16,000 \\\hline \text { Personal Liabilities } & \$ 16,000 & \$ 20,000 \\\hline \text { Partners Capital } & \$ 20,000 & ( \$ 10,000 ) \\\hline\end{array}
What is Dunn's required contribution if the partnership creditors move against him first?


A) $16,000
B) $4,000
C) $10,000
D) $8,000

Correct Answer:

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