Franco, Maria and Gomez entered into a partnership to buy a steel manufacturing plant. They agreed to distribute profits in the same proportion as their respective capital investments in the partnership. How will recent period's profit of $287 800 be allocated to Maria, if Franco's capital investment shows a balance of $34 million, Maria's shows $49 million and Gomez's shows $54.5 million?
A) $75 165
B) $102 561
C) $114 074
D) $257 800
E) $110 000

Question

Quizplus · Accepted Answer

Maria's share of the profit is calculated based on her proportion of the total capital investment. The total capital investment is $34 million + $49 million + $54.5 million = $137.5 million. Maria's proportion is $49 million / $137.5 million. Therefore, her share of the profit is $287,800 * ($49 million / $137.5 million) = $102,561.

Franco, Maria and Gomez Entered into a Partnership to Buy