Aarush, Advik and Azad are partners. The partnership agreement provides that partners will receive interest of 8% of their average capital balance and a salary allowance as follows: $50,000 $40,000 $40,000 Aarush Advik Azad Aarush, who manages the business, will receive a bonus of 25% of the profit in excess of $90 000 after partners interest and salary allowances have been deducted. Residual profits will be divided: Aarush (half) Advik (one third) Azad (one sixth) During the current year their average capital balances were as follows: $250,000 $150,000 $90,000 Aarush Advik Azad Required Prepare a schedule showing how profit will be divided among the three partners if the profit for the year before the adjustments is $320 000.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Aarush, Advik and Azad are partners. The partnership agreement provides that
partners will receive interest of 8% of their average capital balance and a salary
allowance as follows:
$50,000
$40,000
$40,000
Aarush
Advik
Azad
Aarush, who manages the business, will receive a bonus of 25% of the profit in
excess of $90 000 after partners interest and salary allowances have been deducted.
Residual profits will be divided:
Aarush (half)
Advik (one third)
Azad (one sixth)
During the current year their average capital balances were as follows:
$250,000
$150,000
$90,000
Aarush
Advik
Azad
Required
Prepare a schedule showing how profit will be divided among the three partners if
the profit for the year before the adjustments is $320 000.
Transcribed Image Text:Aarush, Advik and Azad are partners. The partnership agreement provides that partners will receive interest of 8% of their average capital balance and a salary allowance as follows: $50,000 $40,000 $40,000 Aarush Advik Azad Aarush, who manages the business, will receive a bonus of 25% of the profit in excess of $90 000 after partners interest and salary allowances have been deducted. Residual profits will be divided: Aarush (half) Advik (one third) Azad (one sixth) During the current year their average capital balances were as follows: $250,000 $150,000 $90,000 Aarush Advik Azad Required Prepare a schedule showing how profit will be divided among the three partners if the profit for the year before the adjustments is $320 000.
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