The following information is available on PDC Enterprises,a partnership,for the most recent fiscal year:
$$\begin{array} { l l }
\text { Total partnership capital at beginning of the year } & \$ 1,080,000 \
\text { Partriership net income for the year } & \$ 1,250,000 \
\text { Withdrawals by partners during the year } & \$ 320,000 \
\text { Additional investrnents by partners during the year } & \$ 70,000
\end{array}$$
There are three partners in TGR Enterprises: Pearson,Darling and Cathay.At the end of the year,the partners' capital accounts were in the ratio of 2:2:1,respectively.Compute the ending capital balances of Cathay.

Question

The following information is available on PDC Enterprises,a partnership,for the most recent fiscal year:
$$\begin{array} { l l } 
\text { Total partnership capital at beginning of the year } & \$ 1,080,000 \
\text { Partriership net income for the year } & \$ 1,250,000 \
\text { Withdrawals by partners during the year } & \$ 320,000 \
\text { Additional investrnents by partners during the year } & \$ 70,000
\end{array}$$
There are three partners in TGR Enterprises: Pearson,Darling and Cathay.At the end of the year,the partners' capital accounts were in the ratio of 2:2:1,respectively.Compute the ending capital balances of Cathay.

Quizplus · Accepted Answer

The ending capital is calculated as: Beginning capital + Net income - Withdrawals + Additional investments. Total ending capital = $1,080,000 + $1,250,000 - $320,000 + $70,000 = $2,080,000. Cathay's share is 1/5 of the total (ratio 2:2:1), so $2,080,000 * 1/5 = $416,000.

The Following Information Is Available on PDC Enterprises,a Partnership,for the Most