Kendra, Copley, and Mei share income and loss in a ratio of 3:2:1. The partners have decided to liquidate their partnership. On the day of liquidation the balance sheet looks as follows:Kendra, Copley, and MeiBalance Sheet: May 31 Assets Liabilities and EquityCash………………….$180,000Accounts Payable…………………$245,500Inventory…………….$538,000Kendra, Capital……………………..$ 93,000Copley, Capital……………………..$212,500Mei, Capital………………………….$167,000Total Assets: $718,000Total Liabilities and Equity: $718,000The inventory was sold for $ 166,000. Proceeds from the sale of inventory and part of existing cash were used to payoff accounts payable.Determine the following:The gain (or loss) realized on the sale of inventory and recording of accounts payable’s payment.The balances in the partners’ capital accounts after the distribution of the gain or loss to the capital accounts.Assume that if any capital deficits exist, they are not made up and the solvent partners pay the deficiency of the deficient partner. How much cash will each of the partners receive in the final liquidation?Provide an explanation between 200 and 300 words in length of the requirements for liquidating the partnership. What documents will be needed? How will the money be distributed? What other options might there be in place of liquidation?
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