Question

QUESTION 31 The Mayer and Rodin partnership agreement stipulates that profits and losses will be shared equally after salary allowances of $400,000 for Mayer and $200,000 for Rodin At the beginning of the year, Mayer's Capital account had a balance of $800,000, while Rodin's Capital account had a balance of $700,000. Net income for the year was $800,000. The balance of Rodin's Capital account at the end of the year after closing is $950,000. O $1,000,000 $850,000 $900,000

Answer 1

800,000 Net income $ Less: Partners' salaries Mayer $ (400,000) Rodin $ (200,000) $ Profit share $ Mayer $200,000 x 50% $ Rodin $200,000 x 50% $ (600,000) 200,000 100,000 100,000 Rodin, Capital Beginning balance Add: share of profit Add: salary Ending balance $ $ $ $ 700,000 100,000 200,000 1,000,000