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16 February, 13:18

The partnership of X and Y shares profits and losses in the ratio of 60 percent to X and 40 percent to Y. For the year 20X8, partnership net income was double X's withdrawals. Assume X's beginning capital balance was $80,000, and ending capital balance (after closing) was $140,000. Partnership net income for the year was:

A. $120,000.

B. $300,000.

C. $500,000.

D. $600,000.

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  1. 16 February, 16:45
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    D. $ 600,000

    Explanation:

    if X's withdrawals = y

    Net Income = 2y

    X 's share of profit = 2y * 60%

    = 1.2 y

    X's Closing capital + X's withdrawals = Opening Capital + Share of Net income

    $ 140000 + y = $ 80000 + 1.2y

    1.2y - y = $ 140000 - $ 80000

    = $60000

    0.20y = $ 60000

    y = $ 300000

    Therefore,

    Net Income = 2y

    = 2*300000

    = $ 600000
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