Barber and Atkins are partners in an accounting firm and share net income and lo

Question

Barber and Atkins are partners in an accounting firm and share net income and loss equally. Barber's beginning partnership capital balance for the current year is $213,000, and Atkins' beginning partnership capital balance for the current year is $237,000. The partnership had net income of $175,000 for the year. Barber withdrew $76,000 during the year and Atkins withdrew $60,000. What is Barber's return on equity?

Multiple Choice

20.0%

40.0%

41.1%

39.0%

37.9%

Barber and Atkins are partners in an accounting firm and share net income and loss equally. Barber's beginning partnership capital balance for the current year is $312,000, and Atkins' beginning partnership capital balance for the current year is $290,000. The partnership had net income of $199,000 for the year. Barber withdrew $113,000 during the year and Atkins withdrew $93,000. What is Atkins's return on equity?

Multiple Choice

33.6%

32.7%

34.3%

33.9%

17.0%

Barber and Atkins are partners in an accounting firm and share net income and loss equally. Barber's beginning partnership capital balance for the current year is $368,000, and Atkins' beginning partnership capital balance for the current year is $176,000. The partnership had net income of $342,000 for the year. Barber withdrew $91,000 during the year and Atkins withdrew $28,000. What is Barber's ending equity?

Multiple Choice

$539,000

$619,000

$256,000

$448,000

$710,000

Explanation / Answer

Req 1: Answer is 40.0% Explanation: Barber Share of Profit: 175000/2= $87,500 Ending Capital: Beginning capital: 213000 Add: net income 87500 Less: Drawings -76000 Ending Capital: 224500 Average capital (213000+224500)/2 = $218,750 Return onEquity: Net income / Average Capital 87500 /218750 *100 = 40% Q2. Asnswer is 33.9% Explanation: Atkin Share of Profit: 199000/2= $99,500 Ending Capital: Beginning capital: 290000 Add: net income 99500 Less: Drawings -93000 Ending Capital: 296500 Average capital = $293,250 Return onEquity: Net income / Average Capital 99500/293250*100 = 33.9% Q3. Asnwer is $448,000 Explanation: Barber Share of iNcome: 342,000/2 = $ 171,000 Ending Capital: Beginning capital: 368000 Add: net income 171000 Less: Drawings -91000 Ending Capital: 448000

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