The following information is available on Stewart Enterprises, a partnership, for the most recent fiscal year: There are three partners in Stewart Enterprises: Stewart, Tedder and Armstrong. At the end of the year, the partners' capital accounts were in the ratio of 2:1:2, respectively. Compute the ending capital balances of the three partners.

Question

The following information is available on Stewart Enterprises, a partnership, for the most recent fiscal year:  There are three partners in Stewart Enterprises: Stewart, Tedder and Armstrong. At the end of the year, the partners' capital accounts were in the ratio of 2:1:2, respectively. Compute the ending capital balances of the three partners.

Quizplus · Accepted Answer

To find each partner's capital balance, we need to first find the total capital at the end of the year. We can do this by adding up the individual capital balances in the ratio of 2:1:2:
2x + x + 2x = 5x
We know that the total capital for the year is $270,000 (from the information given in the financial statement). Therefore:
5x = $270,000
x = $54,000
Now that we know x, we can use the ratio of 2:1:2 to find each partner's capital balance:
Stewart's capital = 2x = 2($54,000) = $108,000
Tedder's capital = x = $54,000
Armstrong's capital = 2x = 2($54,000) = $108,000
Therefore, the ending capital balances for Stewart, Tedder, and Armstrong are $108,000, $54,000, and $108,000, respectively. The correct choice is A.

The Following Information Is Available on Stewart Enterprises, a Partnership