<u>Solution and Explanation:</u>
The total amount of cash available for safe payments would be $25,000 (90,000 - 60,000 - 5,000). This amount will be distributed between Henry and Jacobs in the ratio of 6:4 meaning that $15,000 (25,000*60%) will be given to Henry and $10,000 (25,000*40%) will be given to Jacobs.
The value of $120,000 will be distributed to the partners as follows:
Henry Issac Jacobs
Equity 80,000 110,000 140,000
Less Loss on Assets 36,000 72,000 72,000
Liquidation Expenses 1,000 2,000 2,000
Balances 43,000 36,000 66,000
Less Distribution
of Safe Payments to Partners 15,000 0 10,000
Net Balances $28,000 $36,000 $56,000
