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Teri, Doug, and Brian are partners with capital balances of $20,000, $30,000, and $50,000, respectively. They share income and losses in the ratio of 3:2:1. Revenue accounts for the period total $350,000. Expense accounts for the period total $380,000. The revenue and expense accounts are closed to the capital accounts. Doug withdraws from the partnership. How much cash does he receive upon withdrawal?

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Answer:

Cash being received by the Doug  = Capital balance - Share of Loss (WN)

∴  Capital Balance ($30,000 ) - Share of Loss (WN) ($10,000)  = 20,000

So, he receive $20,000 upon withdrawal  

Explanation:

Total Revenue for the period ($350,000) - Total Expenses for the period ($ 380,000)  = Total Income (Loss) ($ 30,000)

Profit Sharing Ratio = 3:2:1

So, therefore Share of loss of Doug = $ [tex]\frac{30,000 * 2}{6}[/tex] = $ 10,000

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