Paula and Penny have capital balances of $120 000 and $150 000 respectively and use the variable capital balances method. If their profit/loss sharing ratios are Paula 40% and Penny 60%, the balance of Penny's capital balance after a profit of $60 000 is:

Question

Quizplus · Accepted Answer

Penny's share of the profit is 60% of $60,000, which is $36,000. Adding this to her original capital balance of $150,000 gives a new balance of $186,000.

Paula and Penny Have Capital Balances of $120 000 and $150