Applying the Profit and Loss Ratio Method, Compute Taylor and Timmy's

question 32

Multiple Choice

Applying the profit and loss ratio method, compute Taylor and Timmy's share of net income if Taylor invested $200,000 and Timmy invested $800,000 and the profit and loss ratio is 3:2. Net income was $70,000.

• A) Taylor, $14,000; Timmy, $56,000
• B) Taylor, $35,000; Timmy, $35,000
• C) Taylor, $42,000; Timmy, $28,000
• D) None of these answers is correct.

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