What amount of interest will be attributed to jerry for, Ask an Expert

Accounting

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 September 1, Jerry's capital account was credited with a special bonus of $60,000 for business he brought to the 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.)

A. $5,250

B. $6,000

C. $6,400

D. $7,000

E. $7,200

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M955877

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