Amna and Jalal formed a partnership on January 2, 2019. Jalal invested $120,000 in cash. Amna invested land valued at $30,000. In addition, Amna was granted a yearly salary of $60,000 to manage the firm. The partners agreed to the following profit and loss allocation formula: a. Interest-Each partner is to receive an interest of 8% on the original capital investment. b. Salary-$60,000 to Amna. c. Bonus - Amna is to be allocated a bonus of 20% of net income after subtracting the bonus, and salary. d. The remaining profit is to be divided equally. At the end of 2019, the partnership reported net income before interest, salaries, and bonus of $168,000. Instructions: Calculate the 2019 allocation of partnership profit.

Amna and Jalal formed a partnership on January 2, 2019. Jalal invested $120,000 in cash. Amna invested land valued at $30,000. In addition, Amna was granted a yearly salary of $60,000 to manage the firm. The partners agreed to the following profit and loss allocation formula: a. Interest-Each partner is to receive an interest of 8% on the original capital investment. b. Salary-$60,000 to Amna. c. Bonus - Amna is to be allocated a bonus of 20% of net income after subtracting the bonus, and salary. d. The remaining profit is to be divided equally. At the end of 2019, the partnership reported net income before interest, salaries, and bonus of $168,000. Instructions: Calculate the 2019 allocation of partnership profit.

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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