Carmelo Fernandez and Bobby Morett formed a partnership, investing $75,000 and $225,000, 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 5% allowed on original investments and the remainder divided in the ratio of 2:3. d. Salary allowances of $38,000 and $47,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 5% on original investments, salary allowances of $38,000 and $47,000, respectively, and the remainder divided equally. Fernandez $ 150,000 75,000 $ 117,750 a. b. C. d. e. $ $ Morett $ 150,000 $225,000 $ 182,250 $
Carmelo Fernandez and Bobby Morett formed a partnership, investing $75,000 and $225,000, 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 5% allowed on original investments and the remainder divided in the ratio of 2:3. d. Salary allowances of $38,000 and $47,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 5% on original investments, salary allowances of $38,000 and $47,000, respectively, and the remainder divided equally. Fernandez $ 150,000 75,000 $ 117,750 a. b. C. d. e. $ $ Morett $ 150,000 $225,000 $ 182,250 $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Dividing partnership income
Carmelo Fernandez and Bobby Morett formed a partnership, investing $75,000 and $225,000, 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 5% allowed on original investments and the remainder divided in the ratio of 2:3.
d. Salary allowances of $38,000 and $47,000, respectively, and the balance divided equally.
e. Allowance of interest at the rate of 5% on original investments, salary allowances of $38,000 and $47,000, respectively, and
the remainder divided equally.
Fernandez
a.
b.
C.
d.
e.
$ 150,000
75,000
117,750
Morett
$ 150,000
$225,000
$ 182,250
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