Beau Dawson and Willow McDonald formed a partnership, investing $116,000 and $174,000, respectively. Determine their participation in the year's net income of $107,000 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.
Dividing Partnership Income
Beau Dawson and Willow McDonald formed a partnership, investing $116,000 and $174,000, respectively.
Determine their participation in the year's net income of $107,000 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 $47,000, respectively, and the balance divided equally.
e. Allowance of interest at the rate of 5% on original investments, salary allowances of $36,000 and $47,000, respectively, and the remainder divided equally.
Dawson McDonald
a. $ $
b. $ $
c. $ $
d. $ $
e. $ $
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
