1. Convert any non-cash assets into cash.

2. Pay liquidation expenses.

3. Pay the outside creditors.
4. Pay the Partners’ Interest.
a. Capital Balance + Loan from partner
b. Capital Balance – loan to partner
1. Lump-sum

2. Installment
Before a partner receives his share in the final distribution of
cash, he must absorb the TOTAL GAIN / LOSS:
1. Gain / Loss on realization.
2. Liquidation Expenses
3. Deficiency
4. Maximum Possible Loss (MPL)
a. BV of unrealized NCA
b. Cash withheld for future liquidation expenses
Total Interest of the Partners xxx
Gain (Loss) on Realization xxx (xxx)
Liquidation Expenses (xxx)
MPL (xxx)
Condoned Liability xxx
Total Cash Paid to Partners XXX
Interest of Partners PRIOR installment xxx
Gain (Loss) on Realization xxx (xxx)
Liquidation Expenses (xxx)
Cash Paid to Partner (xxx)
Condoned Liability xxx
Interest of Partner NEXT installment XXX