Soledad and Winston are partners who share income in the ratio of 1:3 and have capital balances of $100,000 and $140,000, respectively, at the time they decide to terminate the partnership. After all noncash assets are sold and all liabilities are paid, there is a cash balance of $130,000. What amount of loss on realization should be allocated to Soledad?

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The total capital balances of Soledad and Winston are $100,000 + $140,000 = $240,000. After paying all liabilities, the cash balance is $130,000, indicating a loss of $240,000 - $130,000 = $110,000. The loss is shared in the income ratio of 1:3. Soledad's share of the loss is 1/4 of $110,000, which is $27,500.

Soledad and Winston Are Partners Who Share Income in the Ratio