If at the time of partnership liquidation,Claire has a $7,000 capital deficiency and pays the partnership $7,000 to cover the deficiency,then Claire is entitled to share in the final distribution of cash.

Question

Quizplus · Accepted Answer

When Claire pays the $7,000 to cover her capital deficiency, she is merely fulfilling her obligation to ensure her capital account is balanced at zero; she is not entitled to share in the final distribution of cash unless there are remaining assets after all partners' capital accounts are settled.

If at the Time of Partnership Liquidation,Claire Has a $7,000