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 Wheadon's capital account?
A)$20,000.
B)$25,000.
C)$30,000.
D)$40,000.
E)$75,000.

Question

Quizplus · Accepted Answer

The income is divided based on the ratio of capital investments: Wheadon ($60,000), Davis ($50,000), and Singer ($40,000). The total capital is $150,000. Wheadon's share is $60,000/$150,000 = 0.4. Therefore, Wheadon's share of the $75,000 income is 0.4 * $75,000 = $30,000.

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