Prior to Liquidating Their Partnership, Samuel and Brian Had Capital

question 183

Essay

Prior to liquidating their partnership, Samuel and Brian had capital accounts of $60,000 and $240,000, respectively. The partnership assets were sold for $120,000. The partnership had no liabilities. Samuel and Brian share income and losses equally.​Required
(a) Determine the amount of Samuel's deficiency.
(b) Determine the amount distributed to Brian, assuming Samuel is unable to satisfy the deficiency.

---

Definitions:

Constitutes Offense

Defines or establishes the act or actions considered to be a violation of law or rules.

Modified Comparative Negligence

In some states, a defense whereby the defendant is not liable for the percentage of harm that he or she proves can be attributed to the plaintiff's own negligence if the plaintiff's negligence is responsible for less than 50 percent of the harm. If the defendant establishes that the plaintiff's negligence caused more than 50 percent of the harm, the defendant has no liability.

Fault Percentage

The degree of responsibility, expressed as a percentage, attributed to each party in a legal dispute.

50% At Fault

A principle in some legal systems where, if both parties involved in an accident are equally responsible, each must bear half the liability and damages.