Nee High and Low Jack are partners in an accounting firm and share net income and loss equally. High's beginning partnership capital balance for the current year is $285,000, and Jack's beginning partnership capital balance for the current year is $370,000. The partnership had net income of $250,000 for the year. High withdrew $90,000 during the year and Jack withdrew $100,000. What is High's return on equity?
A) 41.3%
B) 43.9%
C) 32.7%
D) 33.8%
E) 36.5%

Question

Quizplus · Accepted Answer

High's return on equity is calculated as follows:Return on equity = (Net income - Withdrawals) / Beginning capital balance= ($250,000 - $90,000) / $285,000= $160,000 / $285,000= 0.5614= 56.14%

Nee High and Low Jack Are Partners in an Accounting