QUESTION 24 Scrooge and Marley have a partnership agreement which includes the f
ID: 2595505 • Letter: Q
Question
QUESTION 24 Scrooge and Marley have a partnership agreement which includes the following provisions regarding sharing net income or net loss a) A salary allowance of $54,000 to Scrooge and $36,000 to Marley b) An nterest allowanc e of 10% on capital balances at the begn ng of the year c)Tho rernander to be dvded 60% to Scrooge and 40% to Marley The capital balance on January 1,2017, for Scrooge and Marley was 590,000 and $120,000, respectively During 2017, the Scrooge and Marley Partnership had net income of $120,000 Enter the missing values in the schedule below, and caculate the division of n net income to the partner for the year Division of Net Income Maley Scrooge Total Salary allowance Interest allowance Total salaries and interest Remaining inc ome Total division QUESTION 25Explanation / Answer
Scrooge
Marley
Salary
54,000
36,000
Interest
9,000
12,000
Total Salary and Interest
63,000
48,000
Remaining Income
5,400
3,600
Total Division
68,400
51,600
Remaining Income = Total Income – Salary – Interest
= 120,000 – (54,000+36,000) – (9,000+12000)
= 9,000
Scrooge
Marley
Salary
54,000
36,000
Interest
9,000
12,000
Total Salary and Interest
63,000
48,000
Remaining Income
5,400
3,600
Total Division
68,400
51,600