When the liquidation commenced expenses of 20000 were

Reference no: EM13481462

The partnership of Marks, Norris, Smith, and Savannah has now operated for several years. Last year, Marks and Norris reduced their interests in the business and the partnership agreement was amended to reapportion capital interests. Since then, recent market declines have caused several partners to undergo personal financial problems. As a result, the partners have decided to terminate operations and liquidate the business. The following balance sheet is drawn up as a guideline for this process:

Cash	$ 65,000	Liabilities	$ 54,000
Accounts receivable	132,000	Smith, loan	85,000
Inventory	151,000	Marks, capital (30%)	195,000
Land	110,000	Norris, capital (10%)	138,000
Building and equipment (net)	193,000	Smith, capital (20%)	99,000
		Savannah, capital (40%)	80,000
Total assets	$651,000	Total liabilities and capital	$651,000

When the liquidation commenced, expenses of $20,000 were anticipated as being necessary to dispose of all property. Prepare a predistribution plan for the partnership.

Reference no: EM13481462

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