Assignment: Cash Distribution Plan
The partnership of Pen, Evan, and Torves has asked you to assist in winding up its business affairs. You compile the following information:
The trial balance of the partnership on June 30, 20X1, is:
|
Debit
|
Credit
|
|
Cash
|
$6,000
|
|
|
Accounts Receivable (net)
|
$22,000
|
|
|
Inventory
|
$14,000
|
|
|
Plant and Equipment (net)
|
$99,000
|
|
|
Accounts Payable
|
|
$55,000
|
|
Pen, Capital
|
|
$17,000
|
|
Evan, Capital
|
|
$45,000
|
|
Torves, Capital
|
|
$24,000
|
|
Total
|
$141,000
|
$141,000
|
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 $100,000 for the accounts receivable, inventory, and plant and equipment as of June 30. The $100,000 will be paid to creditors and the partners in installments, the number and amounts of which are to be negotiated.
Prepare a cash distribution plan as of June 20, 20X1, showing how much cash each partner will receive if the offer to sell the assets is accepted.