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The equal DEF partnership has the following balance sheet: Cash and other assets $400,000 Recourse liabilities $100,000 Capital – D $100,000 Capital – E $100,000 Capital – F $100,000 The profits and losses are allocated 40% to D, and 30% each to E and F. Under the partnership agreement there is a capital account deficit restoration provision. How should the liability be allocated?

The equal DEF partnership has the following balance sheet: Cash and other assets $400,000 Recourse liabilities $100,000 Capital – D $100,000 Capital – E $100,000 Capital – F $100,000 The profits and losses are allocated 40% to D, and 30% each to E and F. Under the partnership agreement there is a capital account deficit restoration provision. How should the liability be allocated?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The equal DEF partnership has the following balance sheet:
Cash and other assets $400,000
Recourse liabilities $100,000
Capital – D $100,000
Capital – E $100,000
Capital – F $100,000
The profits and losses are allocated 40% to D, and 30% each to E and F. Under the
partnership agreement there is a capital account deficit restoration provision. How
should the liability be allocated?

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