Kevin, Michael, and Brendan have operated a local business as a partnership for several years. All profits and losses have been allocated in a 5:3:2 ratio, respectively. Recently, Brendan has undergone personal financial problems, and is insolvent. To satisfy Brendan's creditors, the partnership has decided to liquidate. The following balance sheet has been produced:

Cash	$30,000		Liabilities	$75,000
Inventory	100,000		Kevin, capital	106,000
Equipment	130,000		Michael, capital	60,000
			Brendan, capital	19,000
Total	$260,000		Total	$260,000

During the liquidation process, the following transactions take place: - Noncash assets are sold for $126,000. - Safe capital distributions are made to the partners. - Payment is made of all business liabilities. - Any deficit capital balances are deemed to be uncollectible.

Develop a predistribution plan for this partnership, assuming $20,000 of liquidation expenses are expected to be paid.

A. Prepare schedules analyzing each partners sensitivity to loss

Schedule A:

Schedule B:

B. Simulate the series of losses

C. Predistribution Plan