Dividing Partnership Net Income Required Steve Prince and Chelsy Bernard formed

Question

Dividing Partnership Net Income Required Steve Prince and Chelsy Bernard formed a partnership, dividing income as follows: 1. Annual salary allowance to Prince of $159,500. 2. Interest of 6% on each partner's capital balance on January 1. 3. Any remaining net income divided to Prince and Bernard, 1:2. Prince and Bernard had $94,160 and $75,000, respectively, in their January 1 capital balances. Net income for the year was $290,000. How much is distributed to Prince and Bernard? Note: Compute partnership share to two decimal places. Round final answers to the nearest whole dollar Prince: Bernard x. Check My Work 1:31AM

Explanation / Answer

Prince Bernard total Salary allowance 159,500 159,500 interest 6%on opening capital 5649.6 4500 10149.6 Remaining net income (1:2) 40116.8 80233.6 120350.4 total 205266 84734 290000 Prince 205266 Bernard 84734 Remaining net income total net income 290,000 less Salary allowance -159,500 interest -10149.6 balance net income to bde distributed 120,350.40 120,350.4 in the ratio of 1:2

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