Rice,Hepburn,and DiMarco formed a partnership with Rice contributing $50,000,Hepburn contributing $30,000,and DiMarco contributing $20,000.Their partnership agreement called for the earnings division to be based on the ratio of capital investments.If the partnership had a net income of $75,000 for its first year of operation,how much would be credited to DiMarco's capital account?
A) $10,000.
B) $15,000.
C) $20,000.
D) $30,000.
E) $75,000.

Question

Quizplus · Accepted Answer

The total capital investment is $50,000 + $30,000 + $20,000 = $100,000. 
DiMarco's capital investment is $20,000 or 20% of the total capital. 
Therefore, his share of the net income will be 20% of $75,000 which is $15,000. This amount will be credited to his capital account.

Rice,Hepburn,and DiMarco Formed a Partnership with Rice Contributing $50,000,Hepburn Contributing