Bill,Page,Larry,and Scott have decided to terminate their partnership.The partnership's balance sheet at the time they decide to wind up is as follows:
During the winding up of the partnership,the other assets are sold for $150,000 and the accounts payable are paid.Page and Larry are personally solvent,but Bill and Scott are personally insolvent.The partners share profits and losses in the ratio of 3:2:1:4.
-Based on the preceding information,what amount will be paid out to Bill upon liquidation of the partnership?

Question

Bill,Page,Larry,and Scott have decided to terminate their partnership.The partnership's balance sheet at the time they decide to wind up is as follows:
  During the winding up of the partnership,the other assets are sold for $150,000 and the accounts payable are paid.Page and Larry are personally solvent,but Bill and Scott are personally insolvent.The partners share profits and losses in the ratio of 3:2:1:4.
-Based on the preceding information,what amount will be paid out to Bill upon liquidation of the partnership?

Quizplus · Accepted Answer

Since Bill is personally insolvent, he will not receive any payout from the liquidation of the partnership. The remaining assets will first be used to pay off accounts payable, then distribute any remaining funds to the partners based on their profit-sharing ratio. Therefore, the answer is A, $0.

Bill,Page,Larry,and Scott Have Decided to Terminate Their Partnership