The Pen, Evan, and Torves Partnership has asked you to assist in winding-up its business...
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Accounting
The Pen, Evan, and Torves Partnership has asked you to assist in winding-up its business affairs. You compile the following information:
The partnerships trial balance on June 30, 20X1, is
Debit
Credit
Cash
$
6,400
Accounts Receivable (net)
24,000
Inventory
18,000
Plant and Equipment (net)
99,300
Accounts Payable
$
11,500
Pen, Capital
59,000
Evan, Capital
49,200
Torves, Capital
28,000
Total
$
147,700
$
147,700
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 $104,000 for the firms accounts receivable, inventory, and plant and equipment as of June 30. The $104,000 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.
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