Rice, Hepburn, and DiMarco formed a partnership with Rice contributing $50,000, Hepburn contributing $30,000, and DiMarco contributing $20,000. Their partnership agreement called for the earnings division to be based on the ratio of capitalinvestments. If the partnership had a profit of $75,000 for its first year of operation, how much would be credited to DiMarco's capital account?

Question

Quizplus · Accepted Answer

DiMarco's capital contribution is 20% of the total ($20,000 out of $100,000). Therefore, DiMarco would receive 20% of the $75,000 profit, which is $15,000.

Rice, Hepburn, and DiMarco Formed a Partnership with Rice Contributing