Answer:
The balance of Tucker's Capital account at the end of the year after profits and losses have been distributed is <u>$412,500</u>
Explanation:
The capital account of a partner in a partnership is an account that shows the equity ownership of that particular partner in the partnership.
The capital of a partner in the partnership is increased by additional cash capital or asset contribution, salary, share of profit, etc., while the capital is reduced by drawing, interest on drawing, share of loss, and others.
The balance of Tucker's Capital account at the end of the year after profits and losses have been distributed can be calculated as follows:
Tucker's Capital account
<u>Particulars $ </u>
Beginning balance 325,000
Salary 150,000
Share of partnership loss (w.2) <u> (62,500) </u>
Ending balance <u> 412,500 </u>
Working:
1. Partnership profit (loss) to distribute = Net income - partners' salaries = $125,000 - $100,000 - $150,000 = ($125,000)
2. Share of profit (loss) = ($125,000) / 2 = ($62,500)
