Dividing Partnership Income Brittany Taylor and Piper Albright formed a partners
ID: 2336656 • Letter: D
Question
Dividing Partnership Income Brittany Taylor and Piper Albright formed a partnership, investing $210,000 and $70,000, respectively. Determine their participation in the year's net income of $250,000 under each of the following independent assumptions: No agreement concerning division of net income. Divided in the ratio of original capital investment. Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:3. Salary allowances of $30,000 and $40,000, respectively, and the balance divided equally. Allowance of interest at the rate of 5% on original investments, salary allowances of $30,000 and $40,000, respectively, and the remainder divided equally.
Explanation / Answer
1 Brittany Taylor Piper Albright Net income 125000 125000 Total 125000 125000 2 Brittany Taylor Piper Albright Net income 187500 62500 Total 187500 62500 3 Brittany Taylor Piper Albright Interest on capital 10500 3500 Remaining Net income 94400 141600 Total 104900 145100 4 Brittany Taylor Piper Albright Salary allowances 30000 40000 Remaining Net income 90000 90000 Total 120000 130000 5 Brittany Taylor Piper Albright Interest on capital 10500 3500 Salary allowances 30000 40000 Remaining Net income 83000 83000 Total 123500 126500