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.

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