Questions: 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 238,000, and Atkins's beginning partners current year is 145,000. The partnership had net income of 351,000 for the year. Barber withdrew 78,000 during the year and Atkins withdrew 40,000. What is Barber's ending equity? Multiple Choice 242,500 511,000 589,000 335,500 413,500

Solution Steps

To find Barber's ending equity, we need to start with Barber's beginning capital balance, add Barber's share of the net income, and then subtract Barber's withdrawals. Since the net income is shared equally between Barber and Atkins, Barber's share of the net income is half of the total net income.

Barber and Atkins share the net income equally. Therefore, Barber's share of the net income is calculated as follows:

\[ \text{Barber's Share of Income} = \frac{\text{Net Income}}{2} = \frac{351000}{2} = 175500 \]

Barber's ending equity can be determined using the formula:

\[ \text{Barber's Ending Equity} = \text{Barber's Beginning Balance} + \text{Barber's Share of Income} - \text{Barber's Withdrawals} \]

Substituting the known values:

\[ \text{Barber's Ending Equity} = 238000 + 175500 - 78000 \]

Calculating this gives:

\[ \text{Barber's Ending Equity} = 335500 \]

Final Answer