The balance sheet of Ryan and Peter's partnership as of December 31,2018,is given below. Ryan and Peter share profits in the ratio 3:2.They have decided to liquidate the partnership.The accounts payable were settled at $17,000 due to the poor financial condition of the partnership firm.As a result,Ryan's capital account will be credited by ________.

Question

The balance sheet of Ryan and Peter's partnership as of December 31,2018,is given below.  Ryan and Peter share profits in the ratio 3:2.They have decided to liquidate the partnership.The accounts payable were settled at $17,000 due to the poor financial condition of the partnership firm.As a result,Ryan's capital account will be credited by ________.

Quizplus · Accepted Answer

When liabilities are settled at less than book value,the resulting gain is allocated to the partners in their existing profit-sharing ratio.
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The Balance Sheet of Ryan and Peter's Partnership as of December