Wheadon, Davis, and Singer formed a partnership with Wheadon contributing $60,000, Davis contributing $50,000 and Singer contributing $40,000. Their partnership agreement called for the income (loss) division to be based on the ratio of capital investments.
- If the partnership had income of $75,000 for its first year of operation, what amount of income (rounded to the nearest thousand) would be credited to Wheadon's capital account?

Question

Quizplus · Accepted Answer

Wheadon's capital contribution is $60,000 out of a total of $150,000 ($60,000 + $50,000 + $40,000), which is 40% of the total capital. Therefore, Wheadon would receive 40% of the $75,000 income, which is $30,000.

Wheadon, Davis, and Singer Formed a Partnership with Wheadon Contributing