Certainly! To solve the question, let's break it down step-by-step.
Arthur, Barbara, and Peggy are general partners in Fabric Unlimited. As general partners, they typically share responsibilities and liabilities for the business. Here are the important details we need to consider:
1. Each partner initially paid [tex]$\$[/tex] 25,000[tex]$ into the partnership.
2. The partnership is in debt amounting to $[/tex]\[tex]$ 150,000$[/tex].
3. Arthur and Barbara have no resources to pay the debt.
### Step-by-Step Solution
1. Liability of General Partners:
- In a general partnership, each partner is personally liable for the debts of the partnership. This means that if a partner cannot pay their share of the debt, the remaining partners must cover the shortfall.
2. Assessing Available Resources:
- Arthur and Barbara have no resources to pay the debt. Therefore, they cannot contribute any amount towards the partnership's debt.
- This implies that the entire liability falls on Peggy if the partnership's creditors pursue her for payment.
3. Maximum Debt Liability:
- Since Arthur and Barbara cannot pay any part of the debt, Peggy, as a general partner with resources, is liable for the entire amount of the partnership's debt to the extent that she can cover it.
Given the situation where Peggy is the only one with resources available to pay the debt, the maximum amount of debt Peggy is liable for is the total unpaid debt, which is [tex]$\$[/tex] 150,000[tex]$.
Therefore, the correct answer is:
b. $[/tex]\[tex]$ 150,000$[/tex]
