Question

Patty and Paul are partners who share income in the ratio of 3:2. Their capital balances are $90,000 and $130,000, respectively. Income Summary has a credit balance of $40,000 after the second closing entry. What is Paul's capital balance after closing Income Summary to the capital accounts?

Answer 1

Answer:

$146,000

Explanation:

Patty and Paul share income in the ratio 3:2

Paul's share will be 2/5 of the income

= 2/5 x $40,000

=0.4 x $40,000

=$16,000

After closing  the capital account, Paul account will have a balance of

=$16,000 + $130,000

=$146,000