Partners Brian,Josh,and Chad have capital balances of $7,000,$3,000,and $90,000,respectively.The losses for the year are $12,000.What will Josh's capital balance be if the three partners share profits and losses at a 2:2:6 ratio?

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Quizplus · Accepted Answer

Josh's capital balance will be a $600 credit balance because he shares in the losses at a 2:2:6 ratio, which means he is responsible for 2/10 of the total losses. The total losses are $12,000, so Josh's share of the losses is $2,400. His capital balance is $3,000, so after the losses are distributed, his capital balance will be $3,000 - $2,400 = $600.

Partners Brian,Josh,and Chad Have Capital Balances of $7,000,$3,000,and $90,000,respectively