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: No agreement concerning division of net income. Divided in the ratio of original capital investment. Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:3.
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: No agreement concerning division of net income. Divided in the ratio of original capital investment. Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:3.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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:
- No agreement concerning division of net income.
- Divided in the ratio of original capital investment.
- Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:3.
- Salary allowances of $36,000 and $47,000, respectively, and the balance divided equally.
- 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 | |
| $ | $ | |
| $ | $ | |
| $ | $ | |
| $ | $ | |
| $ | $ |
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