Partners Ken and Macki each have a $40,000 capital balance and share income and losses in the ratio of 3:2. Cash equals $20,000, noncash assets equal $120,000, and liabilities equal $60,000. If the noncash assets are sold for $80,000, Macki's capital account will

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The noncash assets are sold for $80,000, which is $40,000 less than their book value of $120,000. This results in a $40,000 loss. Ken and Macki share losses in the ratio of 3:2. Macki's share of the loss is 2/5 of $40,000, which equals $16,000. Therefore, Macki's capital account decreases by $16,000.

Partners Ken and Macki Each Have a $40,000 Capital Balance