The Pen, Evan, and Torves Partnership has asked you to assist in winding-up its business affairs. You compile the following information: The partnerships trial balance on June 30, 20X1, is Debit Credit Cash $ 6,500 Accounts Receivable (net) 25,000 Inventory 19,000 Plant and Equipment (net) 99,400 Accounts Payable $ 10,500 Pen, Capital 60,000 Evan, Capital 50,400 Torves, Capital 29,000 Total $ 149,900 $ 149,900 The partners share profits and losses as follows: Pen, 50 percent; Evan, 30 percent; and Torves, 20 percent. The partners are considering an offer of $105,000 for the firms accounts receivable, inventory, and plant and equipment as of June 30. The $105,000 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				50	%	30	%	20	%
Preliquidation capital balances				$60,000		$50,400		$29,000
Loss absorption potential (capital balances / loss percent)	$120,000	$168,000	$145,000
Decrease highest LAP to next highest:
Evan
	$120,000	$168,000	$145,000	$60,000		$50,400		$29,000
Decrease LAPs to next highest:
Evan
Torves
	$120,000	$168,000	$145,000	$60,000		$50,400		$29,000