Ivey and Balzac had a partnership that distributed profits in a ratio of 1:3 respectively.At the end of 2014,they agreed to liquidate the partnership.Prior to liquidation,the partnership had Cash of $50,000,Inventory of $75,000,Equipment (net_of $235,000,and no payables.Partner capital balances were: $\text { Ivey: } \$ 100,000 \quad\quad \text { Balzac: } \$ 260,000$ The inventory was sold for $59,000 and the equipment was sold for $243,000.After the assets were sold,what was Ivey's and Balzac's capital balance?

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The total cash after selling the assets is $50,000 + $59,000 + $243,000 = $352,000. The initial capital was $100,000 (Ivey) + $260,000 (Balzac) = $360,000. The loss from the inventory sale is $75,000 - $59,000 = $16,000, and the gain from the equipment sale is $243,000 - $235,000 = $8,000. The net loss is $16,000 - $8,000 = $8,000. This loss is distributed in the ratio of 1:3, so Ivey's share of the loss is $2,000, and Balzac's share is $6,000. Therefore, Ivey's final capital is $100,000 - $2,000 = $98,000, and Balzac's final capital is $260,000 - $6,000 = $254,000.

Ivey and Balzac Had a Partnership That Distributed Profits in a Ratio