The Pen, Evan, and Torves Partnership has asked you to assist in winding-up its business affairs. You compile the following information.
1.
The partnership’s trial balance on June 30, 20X1, is
Debit
Credit
Cash
$
7,200
Accounts Receivable (net)
38,000
Inventory
27,000
Plant and Equipment (net)
98,400
Accounts Payable
$
10,600
Pen, Capital
67,000
Evan, Capital
57,000
Torves, Capital
36,000
Total
$
170,600
$
170,600
2.
The partners share profits and losses as follows: Pen, 50 percent; Evan, 25 percent; and Torves, 25 percent.
3.
The partners are considering an offer of $112,000 for the firm’s accounts receivable, inventory, and plant and equipment as of June 30. The $112,000 will be paid to creditors and the partners in installments, the number and amounts of which are to be negotiated.
Required:
Prepare a cash distribution plan as of June 30, 20X1, showing how much cash each partner will receive if the partners accept the offer to sell the assets.
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