To determine Ellen's share of the gain or loss, we need to calculate the total gain or loss first.
Total gain or loss = Selling price of noncash assets - Book value of noncash assets
Total gain or loss = $60,000 - ($90,000 - $40,000)
Total gain or loss = $60,000 - $50,000
Total gain or loss = $10,000
Now, we can calculate Ellen's share of the gain or loss using the given ratio.
Ellen's share = Total gain or loss x (Ellen's ratio / Total ratio)
Ellen's share = $10,000 x (2 / (3 + 2 + 3))
Ellen's share = $10,000 x (2 / 8)
Ellen's share = $10,000 x 0.25
Ellen's share = $2,500
Therefore, Ellen's share of the gain or loss would be $2,500.
Below is the post-closing trial balance, prior to liquidation of DEF & Associates. All balances are normal.
Assets: Cash $12,000; Accounts receivable $34,000; Equipment $90,000; Accumulated Depreciation $40,000.
Liabilities and equity: Accounts payable $56,000; Doug's Capital $12,000; Ellen's Capital $10,000; Frank's Capital $18,000.
Partners share gains and losses in a 3:2:3 ratio for Doug, Ellen, and Frank, respectively. Noncash assets were sold for $60,000. Ellen’s share of the gain or loss would be a
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