The following information is available regarding John Smith's capital account in Technology Consulting Group,a general partnership,for a recent year:
What is Smith's partner return on equity during the year in question?

Question

The following information is available regarding John Smith's capital account in Technology Consulting Group,a general partnership,for a recent year:
 What is Smith's partner return on equity during the year in question?

Quizplus · Accepted Answer

Smith's Ending Equity = Beginning Equity + Share of Income - Distributions
David's Ending Equity = $22,000 + $8,500 - $6,000 = $24,500
Partner Return on Equity = Partners' Income/Average Partnership Equity
Partner Return on Equity = $8,500/[($22,000 + $24,500)/2] = 0.366 = 36.6%

The Following Information Is Available Regarding John Smith's Capital Account