If at the time of partnership liquidation, Breck has a $5,000 capital deficiency and paysthe partnership $5,000 to cover the deficiency, then Breck is entitled to share in the final distribution of cash.

Question

Quizplus · Accepted Answer

If Breck pays the partnership $5,000 to cover the capital deficiency, it means he is settling his negative balance. However, he is not entitled to share in the final distribution of cash because his capital account is zero after covering the deficiency.

If at the Time of Partnership Liquidation, Breck Has a $5,000