Cox, North, and Lee Form a Partnership

Multiple Choice

Cox, North, and Lee form a partnership. Cox contributes $180,000, North contributes $150,000, and Lee contributes $270,000. Their partnership agreement calls for a 5% interest allowance on the partner's capital balances with the remaining income or loss to be allocated equally.
- If the partnership reports income of $174,000 for its first year, what amount of income is credited to Lee's capital account?

A) $55,500.
B) $61,500.
C) $57,000.
D) $48,000.
E) $58,000.