Question

Franco and Jason share income and losses in a 2:1 ratio after allowing for salaries of $14,100 and $42,900, respectively. If the partnership suffers a $15,300 loss, by how much would Jason's capital account increase

Answer 1

The answer is $37,800

Step-by-step explanation:

Franco and Jason share profit and loss in the ratio 2:1.

2 is for Franco and 1 is for Jason.

The addition of the two ratios is 3.

Jason's capital account will be his salary minus his share from the loss.

Jason's share from the loss is:

1/3 x $15,300

=$5,100

Jason's salary is $42,900

Therefore, Jason's capital account will increase by:

$42,900 - $5,100

$37,800