Dividing Partnership Income Tyler Hawes and Piper Albright formed a partnership,
ID: 2402157 • Letter: D
Question
Dividing Partnership Income Tyler Hawes and Piper Albright formed a partnership, investing $288,000 and $96,000, respectively Determine their participation in the year's net income of $294,000 under each of the following independent assumptions: a. No agreement concerning division of net income. b. Divided in the ratio of original capital investment. c. Interest at the rate of 18% allowed on original investments and the remainder divided in the ratio of 23. d. Salary allowances of $60,000 and $84,000, respectively, and the balance divided equally e. Allowance of interest at the rate of 18% on original investments, salary allowances of $60,000 and $84,00 respectively, and the remainder divided equal. Hawes Albright (a (b)5Explanation / Answer
Data for Calculations
Net Profit
$ 294,000.00
Tyler Hawes
Piper Albright
Total Capital
Capital Balances
$ 288,000.00
$ 96,000.00
$ 384,000.00
Answers
(a)
When There is no agreement then profit is distributed equally
Tyler Hawes
Piper Albright
Total Distribution
Profit Distribution
$ 147,000.00
$ 147,000.00
$ 294,000.00
(b)
Tyler Hawes
Piper Albright
Total Distribution
Profit Distribution
$ 220,500.00
$ 73,500.00
$ 294,000.00
(C )
Tyler Hawes
Piper Albright
Total Distribution
Interest
$ 51,840.00
$ 17,280.00
$ 69,120.00
Balance Profit
$ 89,952.00
$ 134,928.00
$ 224,880.00
Total Distribution
$ 141,792.00
$ 152,208.00
$ 294,000.00
(d)
Tyler Hawes
Piper Albright
Total Distribution
Salary
$ 60,000.00
$ 84,000.00
$ 144,000.00
Balance Profit
$ 75,000.00
$ 75,000.00
$ 150,000.00
Total Distribution
$ 135,000.00
$ 159,000.00
$ 294,000.00
(e)
Tyler Hawes
Piper Albright
Total Distribution
Interest
$ 51,840.00
$ 17,280.00
$ 69,120.00
Salary
$ 60,000.00
$ 84,000.00
$ 144,000.00
Balance profit
$ 40,440.00
$ 40,440.00
$ 80,880.00
Total Distribution
$ 152,280.00
$ 141,720.00
$ 294,000.00
Data for Calculations
Net Profit
$ 294,000.00
Tyler Hawes
Piper Albright
Total Capital
Capital Balances
$ 288,000.00
$ 96,000.00
$ 384,000.00