[Grooming Grievances] Andrew, Marie, and Cruz Formed a Partnership to Groom

Multiple Choice

[Grooming Grievances] Andrew, Marie, and Cruz formed a partnership to groom dogs. Because they were good friends and anticipated making a profit sufficient to compensate all partners well, the articles of partnership did not allocate profit or losses. Marie was appointed managing partner. Unfortunately, the business did not go as well as expected and the partnership incurred some losses. Cruz claimed that he should not have to share in losses because he had groomed more dogs than anyone. Cruz also claimed that although the partnership did not reference compensation for additional duties, he was entitled to compensation because of his extensive work. Marie claimed that she should not have to share in losses because she contributed more capital than did either of the others. Andrew claimed that he should not have to cover the losses because both Marie and Cruz had been hiding the books from him. He demanded to inspect the books and also to review a listing of all partnership assets and profit statements listing distributions to partners. Marie and Cruz denied that they had been hiding the books and claimed complete innocence of any wrongdoing.
-Which of the following statements is correct regarding how the partnership losses would be allocated?

A) Losses would be allocated first based on a judicial determination as to whether losses should be allocated to a partner because of poor decisions, and, if not, then equally.
B) Losses would be allocated in proportion to the amount of work done in the business, with a partner who contributed more work being allocated less in the way of losses.
C) Losses would be allocated in proportion to the right to share in management.
D) Losses would be allocated equally.
E) Losses would be allocated in proportion to the capital contribution, with partners who contributed more capital being allocated less in the way of losses.