Assume the partnership agreement specifies net income is to be divided in the ratio of capital investments.A's capital account has a balance of $50,000 and B's capital account has a balance of $60,000.If net income for the current year is $25,000,B's distributive share of net income would be:

Question

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B's share of net income is calculated based on the ratio of their capital investment to the total capital. B's share = ($60,000 / ($50,000 + $60,000)) * $25,000 = $13,636.

Assume the Partnership Agreement Specifies Net Income Is to Be