Use the information below to answer the question that follow. The capital accoun

Question

Use the information below to answer the question that follow. The capital accounts of Harrison and Marti have balances of $160,000 and $110,000, respectively, on January 1, the beginning of the current fiscal year. On April 10, Harrison invested an additional $20,000. During the year, Harrison and Marti withdrew $96,000 and $78,000, respectively, and net income for the year was $264,000. The articles of partnership make no reference to the division of net income. Based on this information, the statement of partners' equity would show what amount in the capital account for Harrison on December 31? Oa. $164,000 Ob. $216,000 Oc. $380,000 Od. $52,000

Explanation / Answer

Q1. Answer is b. $ 216000 Explanation: Harrison Capital: beginning capital 160000 Add: Introduced 20000 Add: Share of net income 132000 (264000/2) Less: Withdrawals 96000 Capital of Harrison 216000 Q2. Answer is a. $ 40000 Explanation: Total value off firm 160200 Less: Combined capital 120200 (57700+62500) Bonus 40000 Q3. Answer is d. $ 127500 Explanation: Saturn capital Beginning Capital 120000 Add: Share of income 7500 Ending capital 127500

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