Hillary,Bruce,and Cindy own a partnership firm.Hillary has an ownership interest of $24,000; Bruce has an ownership interest of $41,000; and Cindy has an ownership interest of $30,000.In the process of liquidation,the partnership sells non-cash assets and registers a gain of $30,000.The profit-loss sharing agreement is 1/6 to Hillary; 2/6 to Bruce; and 3/6 to Cindy.Which of the following is TRUE when a journal entry for the allocation of gain is recorded?

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The partnership has realized a gain of $30,000 which will be allocated to the partner's based on their profit-sharing ratio. Hillary's share will be 1/6 of the $30,000 (5000), Bruce's share will be 2/6 of the $30,000 ($10,000) and Cindy's share will be 3/6 of the $30,000 ($15,000). The amount of the gain will be credited to each partner's capital account, with Gain on Disposal being debited for the total amount of the gain of $30,000.

Hillary,Bruce,and Cindy Own a Partnership Firm