Question:
The partnership is not going well, and Tribbs, Bob, and Paul decide to liquidate the partnership. Paul is a little concerned. While Tribbs has plenty of money, Bob is personally insolvent. The partnership sells the apartment building for $165,000, which is a loss from its book value of $189,000.
Using the below balances, show the sale of the apartment building, payment of liabilities, and payments to the partners in liquidation of the partnership.
In the memo, comment on Bob's status in relation to the other partners.
Capital Capital Capital
Cash Assets Liabilities Tribbs Bob Paul Total
Profit and loss percent 45% 25% 30%
Balances $2,000 $189,000 -$80,000 -$64,000 -$5000 -$42,000 $0