Turner Roth and Lowe are partners who share income and loss

Turner, Roth, and Lowe are partners who share income and loss in a 1:3:6 ratio. After lengthy disagreements among the partners and several unprofitable periods, the partners decide to liquidate the partnership. Immediately before liquidation, the partnership balance sheet shows total assets, $123,000; total liabilities, $92,250; Turner, Capital, $1,300; Roth, Capital, $9,425; and Lowe, Capital, $20,025. The cash proceeds from selling the assets were sufficient to repay all but $29,000 to the creditors.

  

Turner, Roth, and Lowe are partners who share income and loss in a 1:3:6 ratio. After lengthy disagreements among the partners and several unprofitable periods, the partners decide to liquidate the partnership. Immediately before liquidation, the partnership balance sheet shows total assets, $123,000; total liabilities, $92,250; Turner, Capital, $1,300; Roth, Capital, $9,425; and Lowe, Capital, $20,025. The cash proceeds from selling the assets were sufficient to repay all but $29,000 to the creditors.

Solution

Solution: Gain (Loss) from selling assets ($59,750) Working Notes:      Total book value of assets $123,000 a   Total liabilities (before liquidation) $92,250 b   Total liabilities remaining after paying proceeds of asset sales to creditors $29,000 c   Cash proceeds from sale of assets $63,250 d=b-c Gain  (Loss) on sale of assets ($59,750) e=d-e Notes: Since, cash proceed from the sale is lower than the book value of the assets hence, its loss Please feel free to ask if anything about above solution in comment section of the question.