Beau Dawson and Willow McDonald formed a partnership, Investing $112,000 and $168,000, respectively. Determine their participation in the year's net income of $300,000 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 6% allowed on original investments and the remainder divided in the ratio of 2:3. d. Salary allowances of $38,000 and $49,000, respectively, and the balance divided equally. Allowance of interest at the rate of 6% on original investments, salary allowances of $38,000 and $49,000, respectively, and the remainder divided equally 2 b. C Dawson $ 150,000V 120,000 ✓ 113,280 X 106,500 X 98,100 X McDonald 150,000 ✓ $ 180,000 $ 169,920 x $ 106,500 x $ 98,100 x
Beau Dawson and Willow McDonald formed a partnership, Investing $112,000 and $168,000, respectively. Determine their participation in the year's net income of $300,000 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 6% allowed on original investments and the remainder divided in the ratio of 2:3. d. Salary allowances of $38,000 and $49,000, respectively, and the balance divided equally. Allowance of interest at the rate of 6% on original investments, salary allowances of $38,000 and $49,000, respectively, and the remainder divided equally 2 b. C Dawson $ 150,000V 120,000 ✓ 113,280 X 106,500 X 98,100 X McDonald 150,000 ✓ $ 180,000 $ 169,920 x $ 106,500 x $ 98,100 x
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Dividing Partnership Income
Beau Dawson and Willow McDonald formed a partnership, Investing $112,000 and $168,000, respectively.
Determine their participation in the year's net income of $300,000 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 6% allowed on original investments and the remainder divided in the ratio of 2:3.
d. Salary allowances of $38,000 and $49,000, respectively, and the balance divided equally.
e Allowance of interest at the rate of 6% on original investments, salary allowances of $38,000 and $49,000, respectively, and the remainder divided
equally.
a.
b.
C
d.
Dawson
150,000 ✓
120,000 ✓
113,280 X
106,500 X
98,100 X
McDonald
150,000 ✓
$180,000
169,920 X
$ 106,500 x
S 98,100 X
Set up a column for each partner and a total column
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