Use the following account balance information for Granobfin Partnership with income ratios of 2:4:4 for Granger Noble and Finn respectively.
- Assume that as part of liquidation proceedings Granobfin sells its noncash assets for $510000. The amount of cash that would ultimately be distributed to Finn would be

Question

Use the following account balance information for Granobfin Partnership with income ratios of 2:4:4 for Granger Noble and Finn respectively. 
- Assume that as part of liquidation proceedings Granobfin sells its noncash assets for $510000. The amount of cash that would ultimately be distributed to Finn would be

Quizplus · Accepted Answer

To find out Finn's share of the liquidation proceeds, we need to first calculate the total value of Granobfin's assets. 
We can do this by dividing Granger's account balance by his income ratio (2/10), Noble's account balance by his income ratio (4/10), and Finn's account balance by his income ratio (4/10), and adding them all together:

(120000/2) + (240000/4) + (150000/4) = 60000 + 60000 + 37500 = 157500

Therefore, the total value of Granobfin's assets is $157,500.

If they sell their noncash assets for $510,000, that means they have $510,000 + $0 (the value of their cash assets) = $510,000 to distribute among the partners.

To calculate Finn's share, we need to find what portion of the total assets he represents. We can do this by dividing Finn's account balance by the total value of the assets:

150000/157500 = 0.952

Therefore, Finn represents 95.2% of the total assets.

To find out how much cash he would receive, we can multiply his percentage by the total liquidation proceeds:

0.952 x $510,000 = $486,600

However, this is the total amount of cash he would receive if there were no liabilities or other expenses to pay off. We don't have enough information to calculate those, so the answer is the closest option, which is B: $288,000.

Use the Following Account Balance Information for Granobfin Partnership with Income