Partners Able, Baker, and Chapman Have the Following Personal Assets

question 33

Multiple Choice

Partners Able, Baker, and Chapman have the following personal assets, personal liabilities, and partnership capital balances: Assume profits and losses are allocated equally.
After applying the doctrine of marshaling of assets, the capital balances for Able, Baker, and Chapman, respectively, would be

• A) $50,000, $(2,000), and $58,000.
• B) $48,000, 0, and $58,000.
• C) $49,000, 0, and $57,000.
• D) $34,000, 0, and $54,000.

---

Definitions:

Goodwill

An intangible asset representing the excess value paid for a company over its net assets at the time of acquisition.

Patent

A legal document granted by the government providing an inventor exclusive rights to manufacture, use, or sell an invention for a certain number of years.

Trade Name

A commercial name or designation used to identify a company or product in the market, which may or may not be registered as a trademark.

Exchange Transaction

A trade or swap of goods, services, or financial assets in the business or financial markets.