Turner, Roth, and Lowe are partners who share income and loss in a 1:4:5 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, $140,400; total liabilities, $90,000; Turner, Capital, $3,700; Roth, Capital, $14,600; and Lowe, Capital, $32,100. The cash proceeds from selling the assets were sufficient to repay all but $34,000 to the creditors.

Required:

a. Calculate the loss from selling the assets.

b. Allocate the loss from part a to the partners.

c. Determine how much, if any, each partner should contribute to the partnership to cover any remaining capital deficiency.

Calculate the loss from selling the assets.

Liabilities before liquidation

Proceeds from sale of assets (paid to creditors)

Remaining liabilities

Proceeds from sale of assets

Book value of assets sold

Loss on sale of assets