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    markjrivera's Avatar
    markjrivera Posts: 9, Reputation: -1
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    #1

    Sep 29, 2010, 08:35 AM
    Net Income of Partnership
    Kevin has a 30% participation in the partnership profits and losses. Kevin's capital account has a net decrease of $120,000 for the current year. During the year, Kevin withdrew $260,000 (charged to his capital account) and contributed property valued at $50,000 to the partnership. What was the net income of the partnership for the current year.
    markjrivera's Avatar
    markjrivera Posts: 9, Reputation: -1
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    #2

    Sep 29, 2010, 08:43 AM

    Is my answer right?

    {[$260,000 - ($120,000 + $50,000)] / 30%} = $300,000
    rehmanvohra's Avatar
    rehmanvohra Posts: 739, Reputation: 27
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    #3

    Sep 29, 2010, 10:34 AM

    I think the correct answer is:

    {[$260,000 - ($120,000 - $50,000)] / 30%} = $270,000

    $50,000 is to be deducted not added
    markjrivera's Avatar
    markjrivera Posts: 9, Reputation: -1
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    #4

    Sep 30, 2010, 02:39 AM

    Net Increase (Decrease) = Investments + Net income share (Deduct if net loss) - Withdrawals

    Net income share / percentage of share in the net icome = net income of the partnership
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