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.
1. 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 |
| $ 17,000 |
Pen, Capital |
| 55,000 |
Evan, Capital |
| 45,000 |
Torves, Capital |
| 24,000 |
Total | $141,000 | $141,000 |
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 $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.
Required
Prepare a cash distribution plan as of June 30, 20X1, showing how much cash each partner will receive if the offer to sell the assets is accepted.
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