Analytical Decision Tree and the Credit Write-Up (Session #1)
Q: Why do we only take into account $86,346 in distributions and ignore the distribution to the other partner?
A: We do take into account distributions to all partners or owners, but, in this instance, there was just the one distribution of $86,346 to Fritz Schumacher. Sequoia Properties made no distribution to the other partner - Luis Castillo.
The Statement of Changes in Partners’ Capital on page 5 in the financial statements show total distributions of $86,346 in 2014, all of which went to Schumacher. This likely reflects a partnership agreement which specifies that Schumacher provides any necessary loans or equity to Sequoia Properties and, in turn, takes the lion's share of distributions.