Question 5

Alex and Bess have been in partnership for many years. The partners, who share profits and losses on a 60:40 basis, respectively, wish to retire and have agreed to liquidate the business. Liquidation expenses are estimated to be $6,000. At the date the partnership ceases operations, the balance sheet is as follows:

Cash	$64,000	Liabilities	$47,000
Noncash assets	230,000	Alex, capital	138,000
		Bess, capital	109,000
Total assets	$294,000	Total liabilities and capital	$294,000

Required:

Prepare a predistribution plan.