If the partnership reports income of $150,000 for its first year, what amount of income is credited to Cox's capital account $47,500.
<h3>Partnership agreement calls for the income</h3>
Cox North Lee
Contribution $180,000 $150,000 $270,000
Interest On Capital balance $9,000 $7,500 $13,500
Profit Allocation (Equally) $40,000 $40,000 $40,000
Amount of Income credited to North's account = $7500 + $40,000 = $47,500
Allocated Profit = $150,000 - ($9,000+$7,500+$13,500) = $120,000
Equal Distribution = $120,000 / 3 = $40,000
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