Liquidating Partnerships Prior to liquidating their partnership, Ellis and Montgomery had capital accounts of $41,000 and $60,000, respectively. Prior to liquidation, the partnership had no cash assets other than what was realized from the sale of assets. These partnership assets were sold for $121,000. The partnership had $4,000 of liabilities. Ellis and Montgomery share income and losses equally. Determine the amount received by Ellis as a final distribution from liquidation of the partnership. $ 52,000 x Feedback Check My Work 1. Begin with Ellis equity prior to liquidation. 2. Adjust the equity for the gain or loss on the sale of the assets. 3. Allocate the gain/loss to partner capital accounts based on the income-sharing ratio. 4. Add beginning equity plus allocated gain/loss to determine liquidation distribution