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

question 32

Multiple Choice

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 Scott upon liquidation of the partnership?

• A)$0
• B)$2,500
• C)$5,000
• D)$6,429

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Definitions:

Dissolution

The process of formally closing or ending an entity, such as a business, partnership, or marriage, through legal means.

Wrongfully Dissociated

In the context of partnership law, this term refers to a partner being expelled or exiting a partnership in violation of the agreement or governing statutes.

Partnership Interest

The ownership stake or share an individual holds in a partnership, representing their portion of the rights and profits.

Dissociation

The process by which a member's involvement in an entity, such as a partnership or limited liability company, is terminated, either voluntarily or involuntarily.