36.	In the liquidation of a partnership, any gain or loss on the realization of noncash assets should be allocated
	A)	first to creditors and the remainder to partners.
	B)	to the partners on the basis of their capital balances.
	C)	to the partners on the basis of their profit-sharing ratio.
	D)	only after all creditors have been paid.

37.

The liquidation of a partnership is a process containing the following steps: 1. Pay partnership liabilities in cash. 2. Allocate the gain or loss on realization to the partners on their profit ratios. 3. Sell noncash assets for cash and recognize a gain or loss on realization. 4. Distribute remaining cash to partners on the basis of their remaining capital balances. Identify the proper sequencing of the steps in the liquidation process.

A) 3, 2, 4, 1. B) 3, 2, 1, 4. C) 1, 3, 2, 4. D) 1, 4, 3, 2.