Chapter 15 SM 8e

In determining safe capital balances, these assumed losses would be allocated on a 4:2 basis or $72,000 to Ross and $36,000 to Thomas. Since such a loss would entirely eliminate Ross' capital account, only Thomas has a safe capital balance at the current time. (c) The minimum cash payment to Thomas would be $35,667 ($19,000 + $16,667). ................
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