Carla and Eliza share income equally. For the current year, the partnership net income is $40,000. Carla made withdrawals of $12,000, and Eliza made withdrawals of $21,000. At the beginning of the year, the capital account balances were: Carla, Capital, $42,000; Eliza, Capital, $55,000. Eliza's capital account balance at the end of the year is

Question

Quizplus · Accepted Answer

Since Carla and Eliza share income equally, the net income of $40,000 will be divided equally between them as well, making their share $20,000 each. 
Carla made withdrawals of $12,000 from her capital account, leaving her with a balance of:
$42,000 (beginning balance) + $20,000 (share of net income) - $12,000 (withdrawals) = $50,000
Eliza made withdrawals of $21,000 from her capital account, leaving her with a balance of:
$55,000 (beginning balance) + $20,000 (share of net income) - $21,000 (withdrawals) = $54,000. 
Therefore, the answer is B.

Carla and Eliza Share Income Equally