Partners Audrey, Betty, and Charles have capital account balances of $120,000 each. The income and loss ratio is 5:2:3, respectively. In the process of liquidating the partnership, noncash assets with a book value of $100,000 are sold for $40,000. The balance of Betty's Capital account after the sale is

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The loss on the sale of noncash assets is $60,000 ($100,000 - $40,000). This loss is allocated to the partners in the income and loss ratio, which is 5:2:3. Betty's share of the loss is $20,000 (2/10 * $60,000). Betty's capital account balance after the sale is $100,000 (her original balance) - $20,000 (her share of the loss) = $80,000.

Partners Audrey, Betty, and Charles Have Capital Account Balances of $120,000