Renee Jackson is a partner in Sports Promoters. Her beginning partnership capital balance for the current year is $55,000, and her ending partnership capital balance for the current year is $62,000. Her share of this year's partnership income was $5,250. What is her partner return on equity?

Question

Quizplus · Accepted Answer

The partner return on equity is calculated by dividing the partner's share of the income by the beginning partnership capital balance, then multiplying by 100 to get a percentage. Renee's return on equity = ($5,250 / $55,000) * 100 = 9.5454...%, which rounds to 9.54%, but due to a mistake in my initial calculation, the correct interpretation based on the provided options should be as follows: The actual calculation should consider any additional contributions or withdrawals, which isn't specified here. Given the numbers, one might initially calculate as I did, but since that option leads to confusion with the provided choices, let's correct the approach based on the standard formula for return on equity, which I mistakenly applied. The correct calculation involves determining the net change in equity excluding the income to find any withdrawals or contributions, but since the question directly asks for the return based on income, my initial calculation stands, yet the acknowledgment of the mistake in choice selection is noted. The correct choice based on the calculation provided should indeed be (C) 9.54%, aligning with the calculation mistake acknowledged.

Renee Jackson Is a Partner in Sports Promoters