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Use the following account balance information for Granobfin Partnership with income ratios of 2:4:4 for Granger, Noble, and Finn, respectively
Use the following account balance information for Granobfin Partnership with income ratios of 2:4:4 for Granger, Noble, and Finn, respectively.
Assets Liabilities and Owner's EquityCash$ 52400 Accounts payable$ 125300Accounts Granger, Capital137600receivable132300 Noble, Capital 48300Inventory 438000 Finn, Capital 311500 $622700
$622700
Assume that, as part of liquidation proceedings, Granobfin sells its noncash assets for $360600. As a result, one of the partners has a capital deficiency which that partner decides not to repay. The amount of cash that would ultimately be distributed to Finn would be
$227620.
$311500.
$203900.
$143600.
Expert Solution
Particulars =Amount
Book value of assets =570300 (132300+ 438000)
Less: sale value =360600
Loss on sale =209700
Multiply: Ratio to Finn =0.4
Share of finn =83880
Capital balance =311500
Less: loss share =83880
Cash distribution =227620
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