Tomas and Saturn are partners who share income in the ratio of 3:1. Their capital balances are $80,000 and $120,000, respectively. The partnership generated net income of $30,000. What is Saturn's capital balance after closing the revenue and expense accounts to the capital accounts?

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Quizplus · Accepted Answer

Saturn's share of the net income is calculated based on the income-sharing ratio of 3:1. The total shares are 3 + 1 = 4. Saturn's share is 1/4 of the net income. 1/4 of $30,000 is $7,500. Adding this to Saturn's original capital balance of $120,000 results in a new capital balance of $127,500.

Tomas and Saturn Are Partners Who Share Income in the Ratio