Rocca, Lambert, Rodgers, and Smith carried on business in partnership for many years. Eventually the partners found that the business could no longer be carried on at a profit. Before anything could be done to sell the business, Rodgers became insolvent. It was then necessary to wind up the business in accordance with the partnership agreement. The partnership agreement provided that the parties share losses and profits equally. In dissolution, the capital accounts of the partners were as follows: Rocca $50,000 Lambert $30,000 Smith $20,000 Rodgers $0 Creditors’ claims at dissolution amounted to $350,000, whereas the total assets of the firm were $250,000. Explain the nature of the liability of the firm. Calculate the liability of each of the partners as between themselves with respect to creditor claims
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Rocca, Lambert, Rodgers, and Smith carried on business in
The partnership agreement provided that the parties share losses and profits equally. In dissolution, the capital accounts of the partners were as follows:
Rocca $50,000 Lambert $30,000 Smith $20,000 Rodgers $0
Creditors’ claims at dissolution amounted to $350,000, whereas the total assets of the firm were $250,000.
Explain the nature of the liability of the firm. Calculate the liability of each of the partners as between themselves with respect to creditor claims.
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