Barber and Atkins are partners in an accounting firm and share net income and loss equally. Barber's beginning partnership capital balance for the current year is $285,000, and Atkins' beginning partnership capital balance for the current year is $370,000. The partnership had net income of $250,000 for the year. Barber withdrew $90,000 during the year and Atkins withdrew $100,000.
-What is Barber's ending equity?
A) $320,000
B) $362,500
C) $195,000
D) $445,000
E) $357,500

Question

Barber and Atkins are partners in an accounting firm and share net income and loss equally. Barber's beginning partnership capital balance for the current year is $285,000, and Atkins' beginning partnership capital balance for the current year is $370,000. The partnership had net income of $250,000 for the year. Barber withdrew $90,000 during the year and Atkins withdrew $100,000. 
-What is Barber's ending equity?
A) $320,000
B) $362,500
C) $195,000
D) $445,000
E) $357,500

Quizplus · Accepted Answer

Barber's beginning equity is $285,000. He withdrew $90,000 during the year, so his ending equity is $285,000 + $125,000 (half of the net income) - $90,000 = $320,000.

Barber and Atkins Are Partners in an Accounting Firm and Share