Dividing Partnership Net Income Required: Steve Jack and Chelsy Dane formed a pa
ID: 2608393 • Letter: D
Question
Dividing Partnership Net Income
Required:
Steve Jack and Chelsy Dane formed a partnership, dividing income as follows:
Annual salary allowance to Jack of $126,000.
Interest of 7% on each partner's capital balance on January 1.
Any remaining net income divided to Jack and Dane, 1:2.
Jack and Dane had $50,000 and $112,600, respectively, in their January 1 capital balances. Net income for the year was $225,000. How much is distributed to Jack and Dane?
Note: Compute partnership share to two decimal places. Round final answers to the nearest whole dollar.
Jack: $
Dane: $
Explanation / Answer
Jack Dane Total Salary 126000 126000 Interest on capital 3500 7882 11382 Remaining income 87618 Distribution of remaining income 29206 58412 87618 Total 158706 66294 225000