A partnership agreement specifies that each partner is to receive 20 percent interest on their weighted average capital balance for the year. Suppose a partner's capital account starts the year with a balance of $100,000. On April 1, $20,000 is withdrawn. On July 1, $5,000 is withdrawn. On September 1, $45,000 is invested. How much partnership income for the year will be allocated to the partner for interest on capital?

Question

Quizplus · Accepted Answer

$100,000(3/12) + $80,000(3/12) + $75,000(2/12) + $120,000(4/12) = $97,500
20% x $97,500 = $19,500

A Partnership Agreement Specifies That Each Partner Is to Receive