Question

Tomas and Saturn are partners who share income in the ratio of 3:1. Their capital balances are $83,500 and $16,200, respectively. The partnership generated net income of $45,400. What is Tomas's capital balance after closing the revenue and expense accounts to the capital accounts? a.$122,190 b.$113,260 c.$133,024 d.$117,550

Answer 1

Answer: D.) $117,550

Step-by-step explanation:

Tomas capital balance = $83,500

Saturn capital balance = $16,200

Net income = $45,400

Income sharing ratio = 3 : 1

Total ratio = 4

Share ( $45,400 ÷ 4) = $11,350

Tomas's share ($11,350 × 3) = $34,050

Tomas's capital balance after closing the revenue and expense accounts to the capital accounts;

(Initial capital balance + share of income)

$(83,500 + 34,050) =$117,550