Carl, Brian, and Ann Share Profits and Losses in a 2:1:1

question 130

Multiple Choice

Carl, Brian, and Ann share profits and losses in a 2:1:1 ratio, respectively, in their partnership. The assets are to be reduced $12,000 in value when Brian wishes to leave the partnership. If each partner had a capital balance of $36,000 before Brian's notification of withdrawal, what amount should Brian be allowed to withdraw from the partnership?

• A) $36,000
• B) $33,000
• C) $24,000
• D) $39,000

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Definitions:

Semiannually

Taking place semiannually, usually once every six months.

Liquidity Risk

The risk that an entity may be unable to convert its assets to cash quickly without significant loss in value, impacting its ability to meet its short-term obligations.

Default Risk

The possibility that a borrower will be unable to make the required payments on their debt obligations.

Maturity Risk

The risk associated with the length of time until the face value of a bond or other debt instrument is repaid, affecting its price and yield.