Gonda, Herron, and Morse Is Considering Possible Liquidation Because Partner

question 1

Multiple Choice

Gonda, Herron, and Morse is considering possible liquidation because partner Morse is personally insolvent. The partners have the following capital balances: $60,000, $70,000, and $40,000, respectively, and share profits and losses 30%, 45%, and 25%, respectively. The partnership has $200,000 in noncash assets that can be sold for $150,000. The partnership has $10,000 cash on hand, and $40,000 in liabilities. What is the minimum that partner Morse's creditors would receive if they have filed a claim for $50,000?

• A) $0.
• B) $27,500.
• C) $45,000.
• D) $47,500.
• E) $50,000.

---

Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing to purchase at a given price level in a given time period.

Demand

The desire to purchase goods and services backed by the ability and willingness to pay at a given price.

Demand Curve

A graphical representation showing the relationship between the price of a product and the quantity of the product demanded at those prices.

Increase in Demand

Refers to a rise in the quantity of a product or service that consumers are willing and able to purchase at various prices, often due to factors like income increases, taste preferences, or changes in population.