The partnership of Pavelski, Ovechin, and Oh has experienced operating losses for three consecutive years. The partners, who have shared profits and losses in the ratio of Steven Pavelski, 60 percent, Eddie Ovechin, 20 percent, and Kwan Oh, 20 percent, are considering liquidating the business. They ask you to analyze the effects of liquidation under various possibilities about the sale of the noncash assets. None of the partners has personal assets if they go into a deficit financial position. They present the following partnership balance sheet amounts at December 31, 2017:

Required
1. Prepare a summary of liquidation transactions for each of the following situations:
a. The noncash assets are sold for $145,200.
b. The noncash assets are sold for $110,400.
2. What legal recourse do the remaining partners have to be reimbursed for deficit balances?

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27,000 Liabilities 475,200 Steven Pavelski, capital $113,400 186,400 120,000 82,400 $502,200 Cash Noncash assets Eddie Ovechin, capital Kwan Oh, capital Total liabilities and capital Total assets S502,200