Jen,Brad,and George formed a partnership with Jen contributing $50,000,Brad contributing $60,000 and George investing $90,000.Their partnership agreement called for the net income division to be based on the ratio of capital investments.If the partnership net income for the first year of operations was $75,000,what amount of net income would be credited to Jen's capital account?

Question

Quizplus · Accepted Answer

Jen's share of the net income is calculated based on her contribution relative to the total capital contributed. The total capital is $50,000 (Jen) + $60,000 (Brad) + $90,000 (George) = $200,000. Jen's contribution is $50,000, which is 25% of the total capital ($50,000 / $200,000). Therefore, Jen's share of the net income is 25% of $75,000, which equals $18,750.

Jen,Brad,and George Formed a Partnership with Jen Contributing $50,000,Brad Contributing