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1. Pryor and Lester are partners, sharing gains and losses equally. They decide to terminate their partnership. Prior to realization, their capital balances are $12,000 and $8,000, respectively. After all noncash assets are sold and all liabilities are paid, there is a cash balance of $16,000.
(a) What is the amount of a gain or loss on realization?
(b) How should the gain or loss be divided between Pryor and Lester?
(c) How should the cash be divided between Pryor and Lester?
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