E 17-8 Statement of partnership liquidation—Partner insolvency case After all partnership assets were converted into cash and all available cash distributed to creditors, the ledger of the Dan, Edd, and Fed partnership showed the following balances:

Debit Credit Accounts payable $20,000 Dan capital (40%) 10,000 Edd capital (30%) 60,000 Fed capital (30%) $90,000

$90,000 $90,000 The percentages indicated are residual profit- and loss-sharing ratios. Personal assets and liabilities of the partners are as follows:

Dan Edd Fed Personal assets $50,000 $50,000 $100,000 Personal liabilities 45,000 40,000 40,000 The partnership creditors proceed against Fed for recovery of their claims, and the partners settle their claims against each other in accordance with UPA.

REQuIRED: Prepare a schedule to show the phaseout of the partnership and final closing of the books.