EXERCISE 14-9

1. Partner B could contribute $12,000 determined as follows:

Other
Assets

Cash
Liabilities
Partner A Partner
B
Partner C
Beginning balances............... $
$ 180,000 $ 150,000 $ 34,000 $(15,000) $
11,000
Sales of assets......................
165,000 (180,000)
(5,000)
(5,000)
(5,000)
Payment of liabilities.............. (150,000)
(150,000)
Balances............................... $ 15,000 $
0 $
0 $ 29,000 $ (20,000) $
6,000
Partner B
Amount
Partnership deficit.................. $ 20,000
Personal liabilities..................
80,000
$ 100,000

Allocation of
% of Total Personal Assets
20.00%
$ 12,000
80.00%
48,000
100.00%
$ 60,000

2. After Partner A contributes $22,500 toward the $24,000 of remaining partnership liabilities,
Partner C would contribute the remaining $1,500 since they have net personal assets of
$8,000. Determined as follows:
Other
Cash
Assets Liabilities
Partner A Partner
B
Partner C
Beginning balances............... $
$ 180,000 $ 150,000 $ 34,000 $(15,000) $
11,000
Sales of assets......................
126,000 (180,000)
(18,000)
(18,000)
(18,000)
Payment of liabilities.............. (126,000)
(126,000)
Balances............................... $
0 $
0 $ 24,000 $ 16,000 $ (33,000) $
(7,000)

Ch. 14Problems

142

Exercise 14-9, Concluded

Partner A
Amount
Partnership creditors............. $ 24,000
Personal liabilities..................
40,000
$ 64,000

Allocation of
% of Total Personal Assets
37.50%
$ 22,500
62.50%
37,500
100.00%
$ 60,000

3. The amounts contributed by Partners B and C are adequate to satisfy the remaining
partnership creditors. Therefore, Partner A would not need to contribute any additional funds
to the partnership.
Other
Assets

Cash
Partner C
Beginning balances............... $
$ 180,000
11,000
Sales of assets......................
135,000 (180,000)
(15,000)
Payment of liabilities.............. (135,000)
Balances............................... $
0 $
0
(4,000)
Contributions by
Partners B and C..............
18,200
3,200
Payment of liabilities..............
(15,000)
Balances............................... $ 3,200 $
0
(800)

Liabilities

Partner A

Partner

$ 150,000

$ 34,000

$(15,000) $

(15,000)
(135,000)
$ 15,000 $ 19,000

(15,000)
$ (30,000) $
15,000

(15,000)
0 $ 19,000

$ (15,000) $

Partner B
Amount
Partnership deficit.................. $ 30,000
Personal liabilities..................
60,000
$ 90,000

Allocation of
% of Total Personal Assets
33.33%
$ 15,000
66.67%
30,000
100.00%
$ 45,000

Partner C
Amount
Partnership deficit.................. $ 4,000
Personal liabilities..................
36,000
$ 40,000

Allocation of
% of Total Personal Assets
10.00%
$
3,200
90.00%
28,800
100.00%
$ 32,000

4. Partner A would first have to absorb the remaining deficit balances of Partners B and C
leaving Partner A with a final capital balance of $3,200. This $3,200 is all that the personal
creditors could recover against Partner As interest in the partnership.