Feldt is a partner in Feldt & Dodson Company. Feldt's share of the partnership income is $18,600 and her average partnership equity is $155,000. Her partner return on equity equals 8.33.
Partner Return on Equity = Partnership Income/Average Partnership Equity
Partner Return on Equity = $18,600/$155,000 = 0.12 = 12%

Question

Quizplus · Accepted Answer

Partner Return on Equity should be calculated as follows:

Partner Return on Equity = Partnership Income/Partner's Average Capital Contribution to the Partnership

In this case, we do not have information about Feldt's capital contribution to the partnership, so we cannot accurately calculate her return on equity. Therefore, the answer is false.

Feldt Is a Partner in Feldt & Dodson Company