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7 October, 12:37

Tomas and Saturn are partners who share income in the ratio of 3:1. Their capital balances are $83,500 and $16,200, respectively. The partnership generated net income of $45,400. What is Tomas's capital balance after closing the revenue and expense accounts to the capital accounts? a.$122,190 b.$113,260 c.$133,024 d.$117,550

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  1. 7 October, 15:09
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    Answer: D.) $117,550

    Explanation:

    Tomas capital balance = $83,500

    Saturn capital balance = $16,200

    Net income = $45,400

    Income sharing ratio = 3 : 1

    Total ratio = 4

    Share ($45,400 : 4) = $11,350

    Tomas's share ($11,350 * 3) = $34,050

    Tomas's capital balance after closing the revenue and expense accounts to the capital accounts;

    (Initial capital balance + share of income)

    $ (83,500 + 34,050) = $117,550
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