D & E.share profits and loss in an agreed ratio of 5/7.With a net income of $85,000 E's share of net income would be:

Question

Quizplus · Accepted Answer

To find E's share of the net income, we need to use the profit-sharing ratio of D & E, which is 5/7. To do so, we need to divide the net income by the total of the ratio (5+7=12) and then multiply the result by E's share of the ratio (5/12).

So, E's share of the net income would be:
($85,000 / 12) x 5/12 = $49,583.33 ≈ $49,583.

Therefore, the best choice is B.

D & EShare Profits and Loss in an Agreed Ratio of 5/7