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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
2. The partners share profits and losses as follows: Pen, 50 percent; Evan, 30 percent; and Torves, 20 percent.
3. The partners are considering an offer of $103,000 for the firms accounts receivable, inventory, and plant and equipment as of June 30. The $103,000 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.

Credit Debit $ 6,300 23,000 17,000 99,200 Cash Accounts Receivable (net) Inventory Plant and Equipment (net) Accounts Payable Pen, Capital Evan, Capital Torves, Capital Total $ 12,500 58,000 48,000 27,000 $145,500 $145,500 PET PARTNERSHIP Cash Distribution Plan June 30, 20X1 Loss Absorption Potential Pen Evan Torves 0001 0 $ 116,000 $ 160,000/ $ 135,000 Pen 501% 58,000 Profit and loss percentages Preliquidation capital balances Loss absorption potential (capital balances / loss percent) Decrease highest LAP to next highest: Evan $ $ 116,000 $ 160,000 $ 135,000 $ 58,000 Decrease LAPs to next highest: | $ 116,000 $ 160,000 $ 135,000 $ 58,000 Capital Accounts Evan 2% 30 % | $ 48,000| | $ Torves 20% 27,000 | $ 48,000 $ 27,000 $ 48,000 $ 27,000

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