Jerry, a partner in the JSK partnership, begins the year on January 1, 2013 with a capital balance of $20,000. The JSK partnership agreement states that Jerry receives 6% interest on this weighted average capital balance.
• On March 1, 2013, when the partnership tax return for 2012 was completed, Jerry's capital account was credited for his share of 2012 profit of $120,000.
• Jerry withdrew $5,000 quarterly, beginning March 31st.
• On September 1, Jerry's capital account was credited with a special bonus of $60,000 for business he brought to the partnership.
What amount of interest will be attributed to Jerry for year 2013 that will go toward his profit distribution for the year? (Use a 360-day year for calculations.)
A) $5,250
B) $6,000
C) $6,400
D) $7,000
E) $7,200
Correct Answer:
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