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Turner, Roth, and Lowe are partners who share income and loss in a 1:5:4 ratio. After lengthy disagreements among the partners and several unprofitable periods,
Turner, Roth, and Lowe are partners who share income and loss in a 1:5:4 ratio. After lengthy disagreements among the partners and several unprofitable periods, the partners decide to liquidate the partnership. Immediately before liquidation, the partnership balance sheet shows total assets, $124,000; total liabilities, $93,000; Turner, Capital, $2,000; Roth, Capital, $13,000; and Lowe, Capital, $16,000. The cash proceeds from selling the assets were sufficient to repay all but $20,000 to the creditors. (a) Calculate the loss from selling the assets. (b) Allocate the loss to the partners. (c) Assume that the Turner, Roth, and Lowe partnership is a limited partnership. Turner and Roth are general partners and Lowe is a limited partner. How much of the remaining $20,000 liability should be paid by each partner
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