Monica and Sabrina have operated as an accounting partnership for the past decade in Biloxi, but now want to retire to pursue other activates. Their partnership balance sheet is presented below

Assets

Cash 200,000

Rec 300,000

Equipment 150,000

BLDG&Land 250,000

Total assets = 900,000

Liabilities and equity

Loan pay 200,000

Cap: M 300,000

Cap: S 400,000

Total L&OE = 900,000

Assume that Monica and Sabrina have a 60% and 40% P&L ratio. Assume that the non- cash assets of the partnership are sold to Stephanie for 600,000. How much cash should be distributed to Monica and Sabrina?

1. M: 240,000, S:360,000
2. M: 300,000 , S: 400,000
3. M: 340,000 , S: 460,000
4. M: 300,000, S: 300,000
5. None of the above