Beau Dawson and Willow McDonald formed a partnership, investing $100,000 and $150,000, respectively. Determine their participation in the year's net income of $290,000 under each of the following independent assumptions: a. No agreement concerning division of net income.b. Divided in the ratio of original capital investment.c. Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:3.d. Salary allowances of $36,000 and $48,000, respectively, and the balance divided equally.e. Allowance of interest at the rate of 5% on original investments, salary allowances of $36,000 and $48,000, respectively, and the remainder divided equally.
Beau Dawson and Willow McDonald formed a partnership, investing $100,000 and $150,000, respectively. Determine their participation in the year's net income of $290,000 under each of the following independent assumptions: a. No agreement concerning division of net income.b. Divided in the ratio of original capital investment.c. Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:3.d. Salary allowances of $36,000 and $48,000, respectively, and the balance divided equally.e. Allowance of interest at the rate of 5% on original investments, salary allowances of $36,000 and $48,000, respectively, and the remainder divided equally.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Beau Dawson and Willow McDonald formed a partnership, investing $100,000 and $150,000, respectively.
Determine their participation in the year's net income of $290,000 under each of the following independent assumptions:
a. No agreement concerning division of net income.
b. Divided in the ratio of original capital investment.
c. Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:3.
d. Salary allowances of $36,000 and $48,000, respectively, and the balance divided equally.
e. Allowance of interest at the rate of 5% on original investments, salary allowances of $36,000 and $48,000, respectively, and the remainder divided equally.
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