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Goshia [24]
3 years ago
14

Cox, North, and Lee form a partnership. Cox contributes $201,000, North contributes $167,500, and Lee contributes $301,500. Thei

r partnership agreement calls for the income or loss division to be based on the ratio of capital invested. If the partnership reports income of $182,000 for its first year, what amount of income is credited to Lee's capital account
Business
1 answer:
Masteriza [31]3 years ago
3 0

Answer:

Lee's portion of income =$81, 900

Explanation:

<em>The income or loss would be shared according to the ratio of capital contributed. The ratio is the proportion of capital contribute per partner to the total pool of capital.</em>

Lee;s portion of income

= lees capital/total capital × reported income

= 301,500/(201,000+167,500+ 301,500)  × 182,000

= $81, 900

Lee's portion of income =$81, 900

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