Question

Barber and Atkins are partners in an accounting firm and share net income and loss equally. Barber's beginning partnership capital balance for the current year is $213,000, and Atkins' beginning partnership capital balance for the current year is $237,000. The partnership had net income of $175,000 for the year. Barber withdrew $76,000 during the year and Atkins withdrew $60,000. What is Barber's return on equity?

Multiple Choice

20.0%

40.0%

41.1%

39.0%

37.9%

Barber and Atkins are partners in an accounting firm and share net income and loss equally. Barber's beginning partnership capital balance for the current year is $312,000, and Atkins' beginning partnership capital balance for the current year is $290,000. The partnership had net income of $199,000 for the year. Barber withdrew $113,000 during the year and Atkins withdrew $93,000. What is Atkins's return on equity?

Multiple Choice

33.6%

32.7%

34.3%

33.9%

17.0%

Barber and Atkins are partners in an accounting firm and share net income and loss equally. Barber's beginning partnership capital balance for the current year is $368,000, and Atkins' beginning partnership capital balance for the current year is $176,000. The partnership had net income of $342,000 for the year. Barber withdrew $91,000 during the year and Atkins withdrew $28,000. What is Barber's ending equity?

Multiple Choice

$539,000

$619,000

$256,000

$448,000

$710,000

Answer 1

Req 1:
Answer is 40.0%
Explanation:
Barber Share of Profit: 175000/2= $87,500
Ending Capital:
Beginning capital:			213000
Add: net income			87500
Less: Drawings			-76000
Ending Capital:			224500
Average capital (213000+224500)/2 = $218,750
Return onEquity: Net income / Average Capital
		87500 /218750 *100 = 40%
Q2.
Asnswer is 33.9%
Explanation:
Atkin Share of Profit: 199000/2= $99,500
Ending Capital:
Beginning capital:			290000
Add: net income			99500
Less: Drawings			-93000
Ending Capital:			296500
Average capital = $293,250
Return onEquity: Net income / Average Capital
		99500/293250*100 = 33.9%
Q3.
Asnwer is $448,000
Explanation:
Barber Share of iNcome: 342,000/2 = $ 171,000
Ending Capital:
Beginning capital:			368000
Add: net income			171000
Less: Drawings			-91000
Ending Capital:			448000