Question

PrintItem 1 Carter Pearson is a partner in Event Promoters. His beginning partnership capital balance for the current year is $55,000, and his ending partnership capital balance for the current year is $62,000. His share of this year's partnership income was $6,250. What is his partner return on equity

Answer 1

Answer: 10.68%

Explanation:

The partner return on equity will be calculated by using the formula given as:

= (Partner Net income/Average Partner equity) × 100

The Partner’s Net income is $6250

Average partner equity = (Opening partner equity + Closing partner equity) × 100

= ($55,000 + $62,000) / 2

= $117,000 / 2

= $58500

The Partner return on equity will then be:

= 6250 / 58500 × 100.

= 10.68%