The partnership of Gil, Hal, Ian, and Joe is preparing to liquidate. Profit- and loss-sharing ratios are shown in the summarized balance sheet at December 31, 2016, as follows:

REQUIRED
1. The partners anticipate installment liquidation. Prepare a cash distribution plan as of January 1, 2017, that includes a $25,000 contingency fund to help the partners predict when they will be included in cash distributions.
2. During January 2017, the inventories are sold for $100,000, the other liabilities are paid, and $50,000 is set aside for contingencies. The partners agree that loan balances should be closed to capital accounts and that remaining cash (less the contingency fund) should be distributed to partners. How much cash should each partner receive?

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Cash Inventories Loan to Hal Other assets $100,000 100,000 10,000 255,000 Other liabilities Gil capital (40%) Hal capital (30%) lan capital (20%) Joe capital (10%) $50,000 150,000 160,000 50,000 55,000 $465.000 $465,000