CCC Partnership borrowed $100,000 on a five-year recourse note from a local bank. It also purchased land for $60,000, putting $10,000 down and signing a qualified nonrecourse loan secured by the land for the balance. The partners’ interests in partnership profits and losses are as follows: Partner                                       Loss                          Profit Carol (general partner)     25%                          50% Charles (limited partner)     40%                          25% Charlotte (limited partner)     35%                          25% How is the $100,000 recourse note allocated to the partners’ bases? How is the $50,000 nonrecourse note allocated to the partners’ bases? How would your answers change if Carol, Charles, and Charlotte were all general partners?

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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CCC Partnership borrowed $100,000 on a five-year recourse note from a local bank. It also purchased land for $60,000, putting $10,000 down and signing a qualified nonrecourse loan secured by the land for the balance. The partners’ interests in partnership profits and losses are as follows:

Partner

                                      Loss                          Profit

Carol (general partner)

    25%                          50%

Charles (limited partner)

    40%                          25%

Charlotte (limited partner)

    35%                          25%

How is the $100,000 recourse note allocated to the partners’ bases?

How is the $50,000 nonrecourse note allocated to the partners’ bases?

How would your answers change if Carol, Charles, and Charlotte were all general partners?

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