Question

Howe and Duley's company is organtzed as a partnership. At the prior year-end, partnership equity totaled $149400 (5100700 fr Howe and $48,700 from Duley). For the current year, partnership net income is $25,000 ($19,600 allocated to Howe and $5,400 allocated to Duley), and year end total partnership equity is $201,100 ($138,600 from Howe and $62,500 from Duley) Compute th total partnership return on equity and the individual partner return on equity ratios. nts 3 Answer is complete but not entirely correct Total Partnership Return or Che Net income Averagequiyership Return on Equity 484% 25,000 1,600 Individual Partner Return on Equity Choose Choose Return on Equity Partners Return on Equity 119,650 5,600 Average equity Net income 16% 9,600 ,400 Howe 10% Duley

Answer 1

	Total Partnership return on equity
	Net Income	Divided by	Average Equity ((149400+201100)/2)	=	Average Equity
	$          25,000	Divided by	$        175,250	=	14.27%
	Individual partner return on equity
	Net Income	Divided by	Average Partner Balance	=	Average Equity
Howe	$          19,600	Divided by	$        119,650	=	16.38%
Deley	$            5,400	Divided by	$          55,600	=	9.71%

	Beginning Balance	Ending Balance	Total	Average Partner Balance (Total/2)
Howe	$        100,700	$        138,600	$        239,300	$        119,650
Deley	$          48,700	$          62,500	$        111,200	$          55,600