The Henry, Isaac, and Jacobs partnership was about to enter liquidation with the following account balances:

Estimated expenses of liquidation were $5,000. Henry, Isaac, and Jacobs shared profits and losses in a ratio of 2:4:4.
What amount of cash was available for safe payments, based on the above information?

Question

The Henry, Isaac, and Jacobs partnership was about to enter liquidation with the following account balances:

Estimated expenses of liquidation were $5,000. Henry, Isaac, and Jacobs shared profits and losses in a ratio of 2:4:4.
What amount of cash was available for safe payments, based on the above information?

Quizplus · Accepted Answer

To determine the cash available for safe payments, we need to first calculate the total assets, which are not given in the question. However, we can calculate it by subtracting the total liabilities from the total equity. 
Total Equity = Henry's equity + Isaac's equity + Jacobs' equity 
= 2x + 4x + 4x (where x represents the same amount of equity for each partner)
= 10x 
Total Liabilities = Estimated expenses of liquidation 
= $5,000 
Total Assets = Total Equity - Total Liabilities 
= 10x - $5,000

Since we do not have any information about x or the actual value of the equity, we cannot solve for Total Assets. Therefore, none of the answer choices are correct.

The Henry, Isaac, and Jacobs Partnership Was About to Enter