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Jerry, a partner in the JSK partnership, begins th...

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Jerry, a partner in the JSK partnership, begins the year on January 1, 2011 with a capital balance of 20,000. The JSK partnership agreement states that Jerry receives 6% interest on this weighted average capital balance. On March 1, 2011, when the partnership tax return for 2010 was completed, Jerry's capital account was credited for his share of 2010 profit of 120,000. Jerry withdrew this amount quarterly, beginning April, 1. On Sep 1, Jerry's capital account was credited with a special bonus of 60,000 for business he brought to partnership. What amount of interest will be attributed to Jerry for year 2011 that will go toward his profit distribution for the year? (Use a 360-day year for calculations). Why the answer is $6,000?

 

Paper#3297 | Written in 18-Jul-2015

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