12.5

Distribution of Cash Upon Liquidation

Manley and Singh are partners, sharing gains and losses equally. They decide to terminate their partnership. Prior to realization, their capital balances are $20,000 and $15,000, respectively. After all noncash assets are sold and all liabilities are paid, there is a cash balance of $19,000.

Hint(s)

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

Gain or Loss	SelectGainLoss
Amount	$

Hint(s)

b. How should the gain or loss be divided between Manley and Singh?

Manley	SelectGainLoss
Singh	SelectGainLoss

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c. How should the cash be divided between Manley and Singh? If an amount is zero, enter "0".

Manley and Singh
Distribution of Cash
		Manley		Singh
Capital balances before realization		$		$
Division of gain or loss on realization
Balances		$		$
Cash distributed to partners
Final balances		$		$