Wheadon,Davis,and Singer formed a partnership with Wheadon contributing $60,000,Davis contributing $50,000 and Singer contributing $40,000.Their partnership agreement called for the income (loss)division to be based on the ratio of capital investments.If the partnership had income of $75,000 for its first year of operation,what amount of income (rounded to the nearest thousand)would be credited to Singer's capital account?
A)$20,000.
B)$25,000.
C)$30,000.
D)$40,000.
E)$75,000.

Question

Quizplus · Accepted Answer

Singer's capital contribution is $40,000 out of a total of $150,000 ($60,000 + $50,000 + $40,000). This means Singer's share of the income is 40,000/150,000 = 4/15. Therefore, Singer's share of the $75,000 income is (4/15) * $75,000 = $20,000.

Wheadon,Davis,and Singer Formed a Partnership with Wheadon Contributing $60,000,Davis Contributing