The average capital investments for 2006 were:
$100,000
200,000
300,000
how much of the $90,000 partnership profit for 2006 should be allocated to jones?
a)$15,000
b)$27,000
c)$30,000
d)$33,000

A)$15,000

Explanation:

jones   100,000

king    200,000

lane   300,000  

Total   600,000

Assuming profit are distributed based on capital investment, jones will receive:

100,000/600,000 = 1/6 of the profit

proft x jones ratio = allocate income to Jones

90,000 x 1/6 = 15,000

This will be the amount of profit attributable to Jones.

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