The partnership agreement of Reid and Simm provides that interest at 10% per year is to be credited to each partner on the basis of weighted-average capital balances. A summary of Simm’s capital account for the year ended December 31, 2006, is as follows:
align=”left”>
|
Balance, January 1 |
$140,000 |
|
Additional investment, July 1 |
40,000 |
|
Withdrawal, August 1 |
(15,000) |
|
Balance, December 31 |
165,000 |
What amount of interest should be credited to Simm’s capital account for 2006?
- $15,250
- $15,375
- $16,500
- $17,250