Instructions1. For each plan, determine the division of the netincome under each of the following assumptions:(1) net income of $276,000 and (2) net income of$480,000. Present the data in tabular form, usingthe following columnar headings:PlanBlack$276,000 PR 12-2A Dividing partnership incomeOBJ. 2Black and Shannon have decided to form a partnership.They have agreed that Black is to invest $360,000 andthat Shannon is to invest $120,000. Black is to devoteone-half time to the business, and Shannon is to devotefull time. The following plans for the division of incomeare being considered:1. Equal division2. In the ratio of original investments3. In the ratio of time devoted to the business4. Interest of 6% on original investments and theremainder equally5. Interest of 6% on original investments, salaryallowances of $96,000 to Black and $168,000 toShannon, and the remainder equally6. Plan (e), except that Shannon is also to be allowed abonus equal to 20% of the amount by which netincome exceeds the total salary allowances

"Since you have posted a question with multiple sub parts, we will solve first three sub parts for you. To get remaining sub parts solved please repost the complete question and mention the sub parts to be solved." The partnership comes into existence when two or more persons agree to do the business and further share profits and losses in a desired ratio. The bonus, salary, interest, etc. are to be paid to partners before distribution of net income. Case 1. Net income $276,000 Part a. Profit sharing ratio of Black and Shannon = 1:1 Profit distribution schedule Black Shannon Total Net income $276,000 Share of partners $138,000 $138,000 Part b. Profit sharing ratio of Black and Shannon = 360,000 : 120,000 = 3:1 Profit distribution schedule Black Shannon Total Net income $276,000 Share of partners $207,000 69,000 Part c. Profit sharing ratio of Black and Shannon = 1/2 : 1 = 1:2 Profit distribution schedule Black Shannon Total Net income $276,000 Share of partners $92,000 $184,000

Business

Accounting

1. For each plan, determine the division of the net income under each of the following assumptions: (1) net income of $276,000 and (2) net income of $480,000. Present the data in tabular form, using the following columnar headings: $276,000

1. For each plan, determine the division of the net income under each of the following assumptions: (1) net income of $276,000 and (2) net income of $480,000. Present the data in tabular form, using the following columnar headings: $276,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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