Cox, North, and Lee form a partnership. Cox contributes $189,000, North contribu

Question

Cox, North, and Lee form a partnership. Cox contributes $189,000, North contributes $157,500, and Lee contributes $283,500. Their partnership agreement calls for a 5% interest allowance on the partner's capital balances with the remaining income or loss to be allocated equally. If the partnership reports income of $184,500 for its first year, what amount of income is credited to Lee's capital account?

Multiple Choice

$51,000.

$61,500.

$65,175.

$58,875.

$60,450.

Cox, North, and Lee form a partnership. Cox contributes $177,000, North contributes $147,500, and Lee contributes $265,500. Their partnership agreement calls for the income or loss division to be based on the ratio of capital invested. If the partnership reports income of $174,000 for its first year, what amount of income is credited to Cox's capital account? (Do not round your intermediate calculations.)

Multiple Choice

$59,700.

$52,200.

$78,300.

$58,000.

$43,500.

Explanation / Answer

1) Distribution of partneship income :

153000

so answer is c) $65175

2) Distribution of partneship income :

so answer is b) $52,200

Total income 184500 Less: Interest on capital (630000*5%) (31500) Balance income (184500-31500)

153000

Lees share in profit (153000/3) 51000 Interest allowance for Lee (283500*5%) 14175 Total share of Lee (14175+51000) 65175

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