Lump-Sum Liquidation

Three university students, Cho, Kenney, and Martinez, operated a successful business, renting furniture and appliances to students residing in dormitories and off-campus apartments. The three are now graduating and wish to sell the business before beginning their respective careers. They shared profits in a 2:1:1 ratio. The partnerships current balance sheet is as follows:

Cash	$5,000		Accounts payable	$50,000
Loan receivableCho	25,000		Loan payableKenney	10,000
Other assets	150,000		CapitalCho	60,000
			CapitalKenney	30,000
			CapitalMartinez	30,000
Total assets	$180,000		Total liabilities and capital	$180,000

Another student group, organized as an LLC, wants to buy the business. The LLC's offer of $110,000 for the partnership's other assets is accepted. After receipt of the $110,000, the liabilities are paid and the partnership is liquidated.

Required

How much does each partner receive? Assume that if one of the partners forms a capital deficit, they are insolvent and will be unable to pay the difference.

Cash Distribution
Cho	Answer
Kenney	Answer
Martinez	Answer