Question

Marta Vazquez is one of three partners in a car dealership. The division of profits and losses as specified in the partnership agreement is 60% for Marta, 25% for the second partner, and 15% for the third partner. The dealership has recently lost a lawsuit and must pay damages of $1,200,000.00.

What is Marta"s liability? What is the liability of each of the other two partners?

Answer 1

Marta's liability is $720,000.00, the second partner's liability is $300,000.00, and the third partner's liability is $180,000.00.

Step-by-step explanation:

In a partnership agreement, Marta Vazquez is allocated 60% of the profits and losses, the second partner is allocated 25%, and the third partner is allocated 15%. When the dealership incurs a loss of $1,200,000.00 due to a lawsuit, each partner's liability is determined by their allocated share.

Marta's liability is calculated by multiplying her allocated share (60%) by the total loss ($1,200,000.00):

Marta's liability = 60% × $1,200,000.00 = $720,000.00

Similarly, the liability of the second partner is:

Second partner's liability = 25% × $1,200,000.00 = $300,000.00

And the liability of the third partner is:

Third partner's liability = 15% × $1,200,000.00 = $180,000.00