Question

The average capital balances of partners Bridget and Emily are $3,000 and $6,000, respectively. Both women work at the business full-time. The business earned a net income of $12,000 for the period. The partners have agreed to share earnings based on the percentage of original investment. Bridget's share of the net income is

Answer 1

Answer:

Bridget's shares=(1/3)×12000=$4,000

Explanation:

Total Capital investment=Bridget capital investment+Emily Capital investment

where;

Bridget capital investment=$3,000

Emily Capital investment=$6,000

Replacing;

Total Capital investment=(3,000+6,000)=$9,000

Bridget's shares=(Bridget capital investment/Total Capital investment)=(3000/9000)=1/3 of total shares

Emily's shares=(Emily Capital investment/Total Capital investment)=

(6000/9000)=2/3 of total shares

Total net income of the business=$12,000

Bridget's shares=(1/3)×12000=$4,000

Emily's shares=(2/3)×12000=$8,000