Present in good accounting form AAA, BBB, and CCC are partners sharing profits and losses in the ratio of 5:3:2. During the year their investments and withdrawals are as follows: Investment of AAA,...

Present in good accounting form

AAA, BBB, and CCC are partners sharing profits and losses in the ratio of 5:3:2. During the year their investments and withdrawals are as follows: Investment of AAA, BBB and CCC for P200,000, P175,000 and P375,000 respectively. Withdrawals of AAA, BBB and CCC amounting to P125,000, P62,500 and P62,500 respectively. On December 31, 2021, the partners decided to liquidate their business. After exhausting partnership assets, liabilities of P125,000 remain unpaid. AAA is personally insolvent.
The gain or loss on realization is:

a. -125,000

b. 625,000

c. -625,000

d. 125,000