Question: Assume that the Tuttle, Ritter, and Lee partnership of Exercise is a limited partnership. Tuttle and Ritter are general partners and Lee is a limited partner. How much of the remaining $24,000 liability should be paid by each partner? (Round amounts to the nearest dollar.)
Exercise: Tuttle, Ritter, and Lee are partners who share income and loss in a 1:4:5 ratio. After lengthy disagreements among the partners and several unprofitable periods, the partners decide to liquidate the partnership. Immediately before liquidation, the partnership balance sheet shows total assets, $116,000; total liabilities, $88,000; Tuttle, Capital, $1,200; Ritter, Capital, $11,700; and Lee, Capital, $15,100. The cash proceeds from selling the assets were sufficient to repay all but $24,000 to the creditors.
(a) Calculate the loss from selling the assets.
(b) Allocate the loss to the partners.
(c) Determine how much of the remaining liability should be paid by each partner.