The assets and equities of the Sam, Red, and Sal partnership at the end of its fiscal year on October 31, 2016, are as follows:

The partners decide to liquidate the partnership. They estimate that the noncash assets, other than the loan to Red, can be converted into $100,000 cash over the two-month period ending December 31, 2016. Cash is to be distributed to the appropriate parties as it becomes available during the liquidation process.
1. The partner most vulnerable to partnership losses on liquidation is:
a. Sam
b. Red
c. Red and Sam equally
d. Sal
2. If $90,000 is available for the first distribution, it should be paid to:

3. If a total amount of $7,500 is available for distribution to partners after all non-partner liabilities are paid, it should be paid as follows:

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Equities Liabilities Loan from Sal Sam capital (30%) Red capital (50%) Sal capital (20%) Assets Cash Receivables-net Inventory Plant assets-net Loan to Red S 15,000 20,000 40,000 70,000 5,000 $150,000 50,000 10,000 45,000 30,000 15,000 $150,000 Creditors, Including Sal $60,000 60,000 50,000 60,000 Sam $18,000 9,000 12,000 Red Sal (Capital) $0 15,000 20,000 $12,000 6,000 8,000 3,000 27,000 Red Sal Sam $7,500 2,250 $0 3,750 3,750 2.500 $0 3,750 1,500 2,500 0 2.500