Question

Assume that MargaretMargaret purchases a 1313​% partnership interest from DaronDaron on June 30 so that MargaretMargaret and DaronDaron each own 2525​% from that date through the end of the year. What are MargaretMargaret and DaronDaron​'s distributive shares for the current​ year

Answer 1

Margaret's distributive share = 18.5%

Daron's distributive share = 31.5%

Step-by-step explanation:

Each partner's distributive share of profits, losses, deductions, etc., is based on the partner's interest on the partnership throughout the year.

During the first half of the year:

• Margaret's interest in the partnership = 12%
• Daron's interest in the partnership = 38%

During the first half of the year:

• Margaret's interest in the partnership = 25%
• Daron's interest in the partnership = 25%

Margaret's distributive share = (12% x 0.5) + (25% x 0.5) = 6% + 12.5% = 18.5%

Daron's distributive share = (38% x 0.5) + (25% x 0.5) = 19% + 12.5% = 31.5%