Blaser,Lukins,and Franko formed a partnership with Blaser contributing $160,000,Lukins contributing $520,000,and Franko contributing $240,000.Their partnership agreement called for the income (loss) division to be based on the ratio of capital investments.If the partnership had income of $275,000 for its first year of operation,what amount of income (rounded to the nearest dollar) would be credited to Franko's capital account?
A)$50,000
B)$240,000
C)$91,667
D)$71,739
E)$275,000

Question

Quizplus · Accepted Answer

Franko's share of the income is based on his capital contribution ratio. Total capital is $160,000 + $520,000 + $240,000 = $920,000. Franko's contribution is $240,000, so his share is $240,000/$920,000 of the income. Therefore, Franko's share of the $275,000 income is ($240,000/$920,000) * $275,000 = $71,739.13, rounded to $71,739.

Blaser,Lukins,and Franko Formed a Partnership with Blaser Contributing $160,000,Lukins Contributing