Dividing Partnership Net Income Required: Steve King and Chelsy Bernard formed a

Question

Dividing Partnership Net Income

Required:

Steve King and Chelsy Bernard formed a partnership, dividing income as follows:

Annual salary allowance to King of $109,150.

Interest of 6% on each partner's capital balance on January 1.

Any remaining net income divided to King and Bernard, 1:2.

King and Bernard had $83,120 and $105,080, respectively, in their January 1 capital balances. Net income for the year was $185,000. How much is distributed to King and Bernard?

Note: Compute partnership share to two decimal places. Round final answers to the nearest whole dollar.
King: $
Bernard: $

Explanation / Answer

Dividing Partnership Net Income :

King Bernard Total Salary allowance 109150 109150 Interest on capital @6% 4987.20 6304.80 11292 Total salary and interest 114137.20 6304.80 120442 Remaining income (185000-120442) 21519.33 43038.67 64558 Total Share in income 135657 49343 185000

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