Prepare a cash distribution plan as of June 30, 20X1, showing how much cash each partner will receive if the partners accept the offer to sell the assets.

The Pen, Evan, and Torves Partnership has asked you to assist in winding-up its business affairs. You compile the following information.

1.

The partnership's trial balance on June 30, 20X1, is

Debit

Credit

Cash

$

7,200

Accounts Receivable (net)

38,000

Inventory

27,000

Plant and Equipment (net)

98,400

Accounts Payable

$

10,600

Pen, Capital

67,000

Evan, Capital

57,000

Torves, Capital

36,000

Total

$

170,600

$

170,600

2.

The partners share profits and losses as follows: Pen, 50 percent; Evan, 25 percent; and Torves, 25 percent.

3.

The partners are considering an offer of $112,000 for the firm's accounts receivable, inventory, and plant and equipment as of June 30. The $112,000 will be paid to creditors and the partners in installments, the number and amounts of which are to be negotiated.

Required:

Prepare a cash distribution plan as of June 30, 20X1, showing how much cash each partner will receive if the partners accept the offer to sell the assets.