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

1.	The partnerships trial balance on June 30, 20X1, is

Debit

Credit

Cash

$

7,300

Accounts Receivable (net)

40,000

Inventory

28,000

Plant and Equipment (net)

98,300

Accounts Payable

$

11,100

Pen, Capital

68,000

Evan, Capital

57,500

Torves, Capital

37,000

Total

$

173,600

$

173,600

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 $113,000 for the firms accounts receivable, inventory, and plant and equipment as of June 30. The $113,000 will be paid to creditors and the partners in installments, the number and amounts of which are to be negotiated.

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 $113,000 for the firms accounts receivable, inventory, and plant and equipment as of June 30. The $113,000 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.

PET PARTNERSHIP
Cash Distribution Plan
June 30, 20X1
	Loss Absorption Potential			Capital Accounts
	Pen	Evan	Torves	Pen		Evan		Torves
Profit and loss percentages					%		%		%
Preliquidation capital balances
Loss absorption potential (capital balances / loss percent)
Decrease highest LAP to next highest:
Decrease LAPs to next highest: