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Question(s) / Instruction(s):

A local partnership was considering the possibility of liquidation since one of the partners (Ding) was personally insolvent. Capital balances at that time were as follows. Profits and losses were divided on a 4:2:2:2 basis, respectively.

      Ding, capital                  $60,000

Laurel, capital                    67,000

Ezzard, capital                    17,000

Tillman, capital                  96,000

 

Creditors of partner Ding filed a $25,000 claim against the partnerships assets. At that time, the partnership held noncash assets reported at $360,000 and liabilities of $120,000. There was no cash on hand at the time.

If the assets could be sold, for $228,000 what is the minimum amount that Tillmans creditors would have received?

A. $36,000.

B. $0.

C. $2,500.

D. $38,250.

E. $67,250.

 

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