Distribution of Cash Upon Liquidation Lyle and Fisher are partners, sharing gain

Question

Distribution of Cash Upon Liquidation

Lyle and Fisher are partners, sharing gains and losses equally. They decide to terminate their partnership. Prior to realization, their capital balances are $15,000 and $7,000, respectively. After all noncash assets are sold and all liabilities are paid, there is a cash balance of $16,000.
Hint(s)

a. What is the amount of a gain or loss on realization?
Loss
Amount $_____?_______



b. How should the gain or loss be divided between Lyle and Fisher?

c. How should the cash be divided between Lyle and Fisher? If an amount is zero, enter "0". Enter all amounts as positive numbers.



Lyle and Fisher


Lyle Fisher
Capital balances before realization $____________ $ ____________



Division of loss on sale of noncash assets $___________ $_____________


Balances $___________ $_____________


Cash distributed to partners $___________ $____________


Final balances $___________ $____________

Explanation / Answer

a. What is the amount of a gain or loss on realization?

Loss $6,000

b. Division of loss on sale of noncash assets:

Lyle $3,000
Fisher $3,000
Since loses and gains are shared equally, the amount you calculated in (a) will go

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