Tomas and Saturn are partners who share income in the ratio of 3:1. Their capital balances are $40,000 and $60,000 respectively. Income Summary has a credit balance of $20,000. What is Saturn's capital balance after closing Income Summary to Capital?

Question

Quizplus · Accepted Answer

First, we need to find the total income earned by Tomas and Saturn by adding their capital balances:

Total capital = $40,000 + $60,000 = $100,000

Next, we need to calculate the amount of income earned by each partner:

Tomas' share = 3/4 * $20,000 = $15,000 
Saturn's share = 1/4 * $20,000 = $5,000

We can now calculate their new capital balances by adding their old capital balances and their share of income:

Tomas' new balance = $40,000 + $15,000 = $55,000 
Saturn's new balance = $60,000 + $5,000 = $65,000

Therefore, the correct answer is D ($65,000).

Tomas and Saturn Are Partners Who Share Income in the Ratio