Rice,Hepburn and DiMarco formed a partnership with Rice contributing $60,000,Hepburn contributing $50,000,and DiMarco contributing $40,000.Their partnership agreement called for the income (loss) division to be based on the ratio of capital investments.If the partnership had income of $75,000 for its first year of operation,what amount of income (rounded to the nearest dollar) would be credited to DiMarco's capital account?
A)$20,000
B)$25,000
C)$30,000
D)$40,000
E)$75,000

Question

Quizplus · Accepted Answer

DiMarco's capital contribution is 40,000 / (60,000 + 50,000 + 40,000) = 1/3. Therefore, DiMarco's share of the income is 1/3 * 75,000 = $25,000.

Rice,Hepburn and DiMarco Formed a Partnership with Rice Contributing $60,000,Hepburn