Partner A bega the year with 20,000 in capital On June 1, 2008, the partner contributed...
Partner A bega the year with 20,000 in capital On June 1, 2008, the partner contributed another 20,00 On September 1, 2008, the partner withdrew 15,000 from the partnership With drawls in excess of $5,000 are charged to the partners capital account The partnership fiscal year-end is December 31 the annual weighted average capital balance is
A 25,00
b 26,667
c 28,334
d 30,000
Homework Answers
--Correct Answer = Option 'B' $ 26,667
| Capital increase (decrease) | Cumulative balance | Balance remained outstanding for | Weighted average capital | ||
| Beginning balance | $20,000 | $20,000 | [Jan-May] = 5 months | $8,333 | 20000 x 5/12 |
| 01-Jun-08 | $20,000 | $40,000 | [June-Aug] = 3 months | $10,000 | 40000 x 3/12 |
| 01-Sep-08 | ($15,000) | $25,000 | [Sept-Dec]= 4 months | $8,333 | 25000 x 4/12 |
| Annual Weighted average capital balance | $26,667 | Answer | |||
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