Partnership profit appropriation for Y

Steps:

• Subtract Y's salary from gross profit: $140,000 -$16,000 = $124,000.
• Compute Y's share of $124,000 in 2:10 ratio:$124,000 × (2/10) = $24,800.
• Compute interest on Y's capital: $20,000 × 6$1,200.
• Add components for Y's total: $16,000 +$24,800 + $1,200 =$42,000.

Why C is correct:

• It applies the partnership formula for Y's total share (salary + interest on capital + ratio share of profit after salary deduction).

Why the others are wrong:

• A ignores salary and interest, taking only ratio share of net profit after all appropriations.
• B equals Y's starting capital balance, not profit share.
• D overstates by taking salary plus ratio share of gross profit without deductions.

Final answer: C