Question

Paul and Roger are partners who share income in the ratio of 3:2. Their capital balances are $90,000 and $130,000, respectively. Income Summary has a credit balance of $50,000 after the second closing entry. What is Roger's capital balance after closing Income Summary to the capital accounts?

A) $150,000

B) $110,000

C)$115,000

D) $155,000

Answer 1

A) $150,000

Step-by-step explanation:

The computation of the roger's capital balance is shown below:

= Opening capital balance of Roger + profit of roger

where,

Profit of roger = Net income × (Roger share ÷ total share)

= $50,000 × (2 ÷ 5)

= $20,000

And, the opening balance of Roger is $130,000

Now put these values to the above formula

So, the value would equal to

= $130,000 + $20,000

= $150,000