Baker, Marshall, and Perryman share profits and losses equally and begin their business with investments of $20,000, $15,000, and $8,000, respectively. They have been unprofitable in their business venture and decide they must liquidate. After all the assets are sold and all debts paid, $16,000 cash remains in the business checking account.

1. Determine the amount of their losses by using the accounting equation.

2. Using the profit-loss ratio, determine the amount of loss allocated to each partner, and determine their new capital balances.

3. Calculate the amount of cash, if any, each partner will receive under the different assumptions below.

   (1) Perryman has personal assets and pays the amount she owes to the partnership.

   (2) Perryman has no personal assets and does not pay the amount she owes to the Partnership.