Question

The Maris-Crane partnership is terminated when creditor claims exceed partnership assets by $40,000. Crane is a millionaire and Maris has no personal assets. Maris'partnership interest is 75% and Crane's is 25%. Creditors:__________.

A) may not require Crane to use his personal assets to satisfy the $40,000 in claims.
B) must collect their claims equally from Maris and Crane.
C) may collect the entire $40,000 from Crane.
D) must collect their claims 75% from Maris and 25% from Crane.

Answer 1

Option "c".

Step-by-step explanation:

Option "c" is the correct answer.

Given the creditor's claim = $40000

Partnership interest of Maris = 75%

Partnership interest of Crane = 25%

The entire amount can be collected from the Crane because in the partnership there is not a limited liability to pay the debt. Therefore, the creditor can claim the entire amount from the Crane.