E16 8 Cash Distribution Plan Adams peters and Blake share Profits and losses for their APB Partnership in a ratio of 2 3 5 When they decide to liquidate the balance sheet is as follows Assets Liabilities and Equities Cash Adams Loan Other Assets Total Assets 40 000 Liabilities 10 000 Adams Capital 200 000 Peters Capital Blake Capital Total Liabilities and Equities 250 00 0 50 000 55 000 75 000 70 000 250 00 0 Liquidation expenses are expected to be negligible No interest accrues on loans with partners after termination of the business Required Prepare a cash distribution plan for the APB Partnership Solution Assumption Other assets are assumed to be sold at the book value of 200 000 as its market or sale value is not given CASH DISTRIBUTION PLAN Cash Adams Loan Other assets Liabilities Adams Capital Peters Capital Blake Capital Balance before liquidation 40 000 10 000 50 000 55 000 75 000 70 000 Sale of other assets 200 000 240 000 10 000 50 000 55 000 75 000 70 000 Settlement of liabilities 50 000 50 000 190 000 10 000 55 000 75 000 70 000 200 000 200 000 Adams loan debited to capital 10 000 10 000 45 000 75 000 75 000 70 000 70 000 190 000 45 000 Balance cash distributed 190 000 Ending balances