Lauren, Matthew, and Susan form a partnership, Lauren contributing $10,000; Matthew $5,000; and Susan her time and

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Lauren, Matthew, and Susan form a partnership, Lauren contributing $10,000; Matthew $5,000; and Susan her time and skill. Nothing is said regarding the division of profits. The firm later dissolves. No distributions to partners have been made since the partnership was formed. The partnership sells its assets for a loss of $9,000. After payment of all firm debts, $6,000 is left. Lauren claims that she is entitled to the entire $6,000. Matthew contends that the distribution should be $4,000 to Lauren and $2,000 to Matthew. Susan claims the $6,000 should be divided equally among the partners. Who is correct? Explain.

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
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