Dividing Partnership Net Income Required: Steve Conyers and Chelsy Stevens forme

Question

Dividing Partnership Net Income

Required:

Steve Conyers and Chelsy Stevens formed a partnership, dividing income as follows:

Annual salary allowance to Conyers of $66,000.

Interest of 11% on each partner's capital balance on January 1.

Any remaining net income divided to Stevens and Conyers, 2:1.

Conyers and Stevens had $30,000 and $195,000, respectively, in their January 1 capital balances. Net income for the year was $300,000. How much net income should be distributed to Conyers and Stevens? Round answers to the nearest whole dollar.
Conyers: $
Stevens: $

Explanation / Answer

Computation of Interest :-

Stevens = Capital * Interest Rate

= $195000 * 11%

= $21450

Conyers = $30000 * 11%

= $3300

Computation of Income :-

Particulars Stevens Conters Net Income $300000 Salary $66000 ($66000) interest at 11% $21450 $3300 ($24750) Profit (2 : 1) $139500 $69750 $209250 Net Income $226950 $73050

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