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22 April, 02:11

Tomas and Saturn are partners who share income in the ratio of 3:1. Their capital balances are $40,000 and $60,000, respectively. The partnership generated net income of $20,000. What is Saturn's capital balance after closing the revenue and expense accounts to the capital accounts

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  1. 22 April, 02:14
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    capital balance of Saturn: 65,000

    Explanation:

    Saturn participation in the net income:

    1:3 >> 1 / 4 = 25%

    capital balance of Saturn 60,000

    net income : 20,000 x 25% = 5,000

    capital balance of 65,000

    We simply add up the percentage of participation in the win/losses to Saturn capital account
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