Answer to Question #207691 in Accounting for syd

Question

. R. Beesley and A. Stanford each contributed $120,000 to purchase a shared equally.

 a)     If the business earned a profit of $32,000 after the original payment. What is the profit for each owner? (2 marks)

 b)     Calculate each owner's profit as a percent of the original contribution.

Answer 1

a) If the business earned a profit of $32,000 after the original payment, then the profit for each owner is 32,000/2 = $16,000.

b) Each owner's profit as a percent of the original contribution is:

16,000/120,000×100% = 13.33%.