A partnership agreement specifies that each partner is to receive 25 percent interest on their weighted average capital balance for the year. Suppose a partner's capital account starts the year with a balance of $120,000. On May 1, $20,000 is withdrawn. On August 1, $50,000 is invested. On December 1, $18,000 is withdrawn. How much partnership income for the year will be allocated to the partner for interest on capital?

Question

Quizplus · Accepted Answer

$120,000(4/12) + $100,000(3/12) + $150,000(4/12) + $132,000(1/12) = $126,000
25% x $126,000 = $31,500

A Partnership Agreement Specifies That Each Partner Is to Receive