The following information is available regarding Grace Smit's capital account in Enterprise Consulting Group,a general partnership,for a recent year: What is Smit's partner return on equity during the year in question?
A)36.6%
B)34.7%
C)10.8%
D)11.4%
E)55.7%

Question

The following information is available regarding Grace Smit's capital account in Enterprise Consulting Group,a general partnership,for a recent year:  What is Smit's partner return on equity during the year in question?
A)36.6% 
B)34.7% 
C)10.8% 
D)11.4% 
E)55.7%

Quizplus · Accepted Answer

To calculate partner return on equity, we need to determine the change in the capital account balance (profit or loss) and divide it by the beginning capital account balance.

Beginning capital account balance = $90,000 
Ending capital account balance = $120,000

Change in capital account balance = $120,000 - $90,000 = $30,000

Partner return on equity = (Change in capital account / Beginning capital account) x 100 
= ($30,000 / $90,000) x 100 
= 33.3%

Therefore, the closest answer choice is A) 36.6%.

The Following Information Is Available Regarding Grace Smit's Capital Account