Alpha and Beta are partners who share income in the ratio of 1:2 and have capital balances of $40,000 and $70,000 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 $50,000. What amount of loss on realization should be allocated to Alpha?

Question

Quizplus · Accepted Answer

The loss on realization is $100,000 ($150,000 - $50,000). Alpha's share of the loss is $20,000 (1/3 x $100,000).

Alpha and Beta Are Partners Who Share Income in the Ratio