Partnership : Partnership is one of the types of business origination. Under the partnership, two or more individuals agree to form a business together and share losses and profits in the predetermined ratio. Partner Return on equity: Partner Return on equity is the profitability measure to determine the % of return earned on the partner’s investment in the partnership. Partner Return on equity is calculated by dividing the Partner net income by Average Partner equity. The formula to calculate Partner Return on equity is as follows: P a r t n e r R e t u r n o n e q u i t y = P a r t n e r n e t i n c o m e A v e r a g e P a r t n e r e q u i t y The formula to calculate the Average Partner equity is as follows: A v e r a g e P a r t n e r e q u i t y = ( B e g i n n i n g P a r t n e r e q u i t y + E n d i n g P a r t n e r e q u i t y ) 2 To determine: The partner return on equity for each partner and partnership

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Answer 1

Question

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

Chapter 12, Problem 8QS

To determine

Concept introduction:

Partnership: Partnership is one of the types of business origination. Under the partnership, two or more individuals agree to form a business together and share losses and profits in the predetermined ratio.

Partner Return on equity: Partner Return on equity is the profitability measure to determine the % of return earned on the partner’s investment in the partnership. Partner Return on equity is calculated by dividing the Partner net income by Average Partner equity. The formula to calculate Partner Return on equity is as follows:

$P a r t n e r R e t u r n o n e q u i t y = \frac{P a r t n e r n e t i n c o m e}{A v e r a g e P a r t n e r e q u i t y}$

The formula to calculate the Average Partner equity is as follows:

$A v e r a g e P a r t n e r e q u i t y = \frac{(B e g i n n i n g P a r t n e r e q u i t y + E n d i n g P a r t n e r e q u i t y)}{2}$

To determine: The partner return on equity for each partner and partnership

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Answer 2

Question

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

Chapter 12, Problem 8QS

To determine

Concept introduction:

Partnership: Partnership is one of the types of business origination. Under the partnership, two or more individuals agree to form a business together and share losses and profits in the predetermined ratio.

Partner Return on equity: Partner Return on equity is the profitability measure to determine the % of return earned on the partner’s investment in the partnership. Partner Return on equity is calculated by dividing the Partner net income by Average Partner equity. The formula to calculate Partner Return on equity is as follows:

$P a r t n e r R e t u r n o n e q u i t y = \frac{P a r t n e r n e t i n c o m e}{A v e r a g e P a r t n e r e q u i t y}$

The formula to calculate the Average Partner equity is as follows:

$A v e r a g e P a r t n e r e q u i t y = \frac{(B e g i n n i n g P a r t n e r e q u i t y + E n d i n g P a r t n e r e q u i t y)}{2}$

To determine: The partner return on equity for each partner and partnership

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

Chapter 12, Problem 8QS

To determine

Concept introduction:

Partnership: Partnership is one of the types of business origination. Under the partnership, two or more individuals agree to form a business together and share losses and profits in the predetermined ratio.

Partner Return on equity: Partner Return on equity is the profitability measure to determine the % of return earned on the partner’s investment in the partnership. Partner Return on equity is calculated by dividing the Partner net income by Average Partner equity. The formula to calculate Partner Return on equity is as follows:

$P a r t n e r R e t u r n o n e q u i t y = \frac{P a r t n e r n e t i n c o m e}{A v e r a g e P a r t n e r e q u i t y}$

The formula to calculate the Average Partner equity is as follows:

$A v e r a g e P a r t n e r e q u i t y = \frac{(B e g i n n i n g P a r t n e r e q u i t y + E n d i n g P a r t n e r e q u i t y)}{2}$

To determine: The partner return on equity for each partner and partnership

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

Chapter 12, Problem 8QS

To determine