Paul and Roger are partners who share income in the ratio of 3:2. Their capital balances are $90,000 and $130,000, respectively. The partnership generated net income of $50,000 for the year. What is Roger's capital balance after closing the revenue and expense accounts to the capital accounts?

Question

Quizplus · Accepted Answer

Roger's share of the net income is calculated based on the income-sharing ratio. The total income to be shared is $50,000, with a sharing ratio of 3:2. This means Roger gets 2 parts of every 5 parts of income. Calculating his share: (2/5) * $50,000 = $20,000. Adding this to his original capital balance of $130,000 gives $150,000.

Paul and Roger Are Partners Who Share Income in the Ratio