Answered

The capital accounts of Hawk and Martin have balances of $160,000 and $140,000, respectively, on January 1, 2010, the beginning of the current fiscal year. On April 10, Hawk invested an additional $10,000. During the year, Hawk and Martin withdrew $86,000 and $68,000, respectively, and net income for the year was $258,000. The articles of partnership make no reference to the division of net income.
Based on this information, the statement of partners’ equity for 2010 would show what amount in the capital account for Hawk on December 31, 2010?
A. $211,600
B.$213,000
C. $201,000
D. $203,000

Answer :

Answer:

Capital account of Hawk =   $213000

so correct option is B.$213,000

Explanation:

given data

capital accounts of Hawk =   $160,000

capital accounts of Martin =   $140,000

Hawk invested = $10,000

Hawk withdrew = $86,000

Martin withdrew = $68,000

net income = $258,000

to find out

what amount in the capital account for Hawk

solution

we know here that profit is distributed equally between the partners

so  

Hawk's profit will be here = [tex]\frac{258000}{2}[/tex]

Hawk's  profit = $129000

so  

Capital account of Hawk will be as

Capital account of Hawk = Opening Balance + Capital Introduced + Profit  - withdrew   ....................................1

Capital account of Hawk = $160000 + $10000 + $129000 - $86000

Capital account of Hawk =   $213000

so correct option is B.$213,000

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