D is corrent. The solutions approach is to construct a T-account representing Plack’s capital account as illustrated below.
Plack’s contribution to the partnership would increase his capital account by $25,000 while the withdrawal would decrease his capital account by $130,000. Given a net decrease of $60,000, Plack would have been allocated net income of $45,000 ($130,000 – $25,000 – $60,000). Since Plack has a 30% participation in partnership profits and losses, the entire partnership income was $150,000 computed as follows:
A is incorrect. The solutions approach is to construct a T-account representing Plack’s capital account as illustrated below.
Plack’s contribution to the partnership would increase his capital account by $25,000 while the withdrawal would decrease his capital account by $130,000. Given a net decrease of $60,000, Plack would have been allocated net income of $45,000 ($130,000 – $25,000 – $60,000). Since Plack has a 30% participation in partnership profits and losses, the entire partnership income was $150,000 computed as follows:
A is incorrect. The solutions approach is to construct a T-account representing Plack’s capital account as illustrated below.
Plack’s contribution to the partnership would increase his capital account by $25,000 while the withdrawal would decrease his capital account by $130,000. Given a net decrease of $60,000, Plack would have been allocated net income of $45,000 ($130,000 – $25,000 – $60,000). Since Plack has a 30% participation in partnership profits and losses, the entire partnership income was $150,000 computed as follows:
A is incorrect. The solutions approach is to construct a T-account representing Plack’s capital account as illustrated below.
Plack’s contribution to the partnership would increase his capital account by $25,000 while the withdrawal would decrease his capital account by $130,000. Given a net decrease of $60,000, Plack would have been allocated net income of $45,000 ($130,000 – $25,000 – $60,000). Since Plack has a 30% participation in partnership profits and losses, the entire partnership income was $150,000 computed as follows:
