Fred and Manuel each contribute $$100,000$ to the newly formed FM P$/$S in exchange for a $50\%$

interest. The partnership uses the available funds to acquire equipment costing $$160,000$ and to

fund current operating expenses. The partnership agreement provides that the depreciation will

be allocated $95\%$ to Fred and $5\%$ to Manuel. All other items of income and loss will be allocated

equally between the partners. In accordance with the partnership agreement, upon liquidation of

the partnership, property will be distributed to the partners in accordance with their capital

account balances. Also in accordance with the partnership agreement, any partners with a

negative capital account must contribute cash in the amount of the negative balance to restore the

capital account to zero.