Cal, Dex, and Erin agree to be partners in Fajitas, a food cart outfit, splitting the profits equally. Cal contributes 65 percent of the capital. When Fajitas is dissolved, its liabilities are greater than its assets. The losses are paid by
A)all of the partners in proportion to their capital contributions.
B)all of the partners in proportion to their shares of the profits.
C)Cal because he contributed most of the capital.
D)Dex and Erin because they contributed the least of the capital.

Question

Quizplus · Accepted Answer

In a partnership, losses are typically shared in the same manner as profits, unless otherwise agreed upon. Since Cal, Dex, and Erin agreed to split profits equally, they would also share any losses equally, regardless of their individual capital contributions.

Cal, Dex, and Erin Agree to Be Partners in Fajitas