Gary,Peter and Chris and have capital balances of $27,000,$43,000,and $31,000,respectively.As per the partnership agreement,Gary gets a profit share of 2/9;Peter gets 4/9;and Chris gets 3/9.The partnership agrees to pay $21,000 as the final settlement to Gary.How much bonus does Peter receive as a result of this transaction?
A)$2667
B)$3429
C)$2571
D)$3333

Question

Quizplus · Accepted Answer

First, we need to determine the total profit of the partnership. Since the profit share ratios are 2:4:3, we can add them up to get 9 parts. This means that Gary gets 2/9 of the profit, Peter gets 4/9, and Chris gets 3/9.

To find the total profit, we can set up a proportion:

2/9 : 4/9 : 3/9 = 27000 : 43000 : 31000

Simplifying this, we get:

2:4:3 = 27000 : 43000 : 31000

Multiplying each side by 3, we get:

6 : 12 : 9 = 81000 : 129000 : 93000

Adding these up, we get a total capital of $303,000.

Next, we need to find out how much of this profit goes to Peter. Since Peter's profit share is 4/9, we can set up another proportion:

4/9 = x/303000

Solving for x, we get:

x = (4/9) * 303000

x = 134000

This means that Peter's share of the profit is $134,000.

Since Gary receives $21,000 as a settlement, we can subtract this from the total profit:

$303,000 - $21,000 = $282,000

Now, we need to determine Peter's bonus. We know that his share of the profit is $134,000, but he also receives a bonus as a result of Gary's settlement. To calculate the bonus, we can set up a proportion:

$21,000 : $282,000 = x : $134,000

Solving for x, we get:

x = ($21,000 * $134,000) / $282,000

x = $10,027

Therefore, Peter's bonus is $10,027.

The answer is B) $3429.

Gary,Peter and Chris and Have Capital Balances of $27,000,$43,000,and $31,000,respectively