Howe and Duley’s company is organized as a partnership. At the prior year-end, partnership equity totaled $150,000 ($100,000 from Howe and $50,000 from Duley). For the current year, partnership net income is $24,990 ($20,040 allocated to Howe and $4,950 allocated to Duley), and year-end total partnership equity is $200,000 ($140,000 from Howe and $60,000 from Duley). Compute the total partnership return on equity and the individual partner return on equity ratios.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Howe and Duley’s company is organized as a
$150,000 ($100,000 from Howe and $50,000 from Duley). For the current year, partnership net income is
$24,990 ($20,040 allocated to Howe and $4,950 allocated to Duley), and year-end total partnership equity
is $200,000 ($140,000 from Howe and $60,000 from Duley). Compute the total partnership return on
equity and the individual partner return on equity ratios.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
