Chapter 12 Karen Smith and Abby Jones formed a partnership, investing $250,000 and $125,000, respectively. Determine their participation in the year's net income of $420,000 under each of the following independent assumptions. Please show your calculations. a. No agreement concerning division of net income. b. Divided in the ratio of original capital investment. c. Interest at the rate of 4% allowed on original investments and the remainder divided in the ratio of 4:1. I

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Chapter1: Financial Statements And Business Decisions
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BUS 208 - Principles of Accounting II
Chapter 12
Karen Smith and Abby Jones formed a partnership, investing $250,000 and $125,000,
respectively. Determine their participation in the year's net income of $420,000 under each of
the following independent assumptions. Please show your calculations.
a. No agreement concerning division of net income.
b. Divided in the ratio of original capital investment.
c. Interest at the rate of 4% allowed on original investments and the remainder divided in
the ratio of 4:1.
X
d. Salary allowances of $50,000 and $60,000, respectively, and the remainder divided
equally.
e. Allowance of interest at the rate of 5% on original investments, salary allowances
of $40,000 and $80,000 respectively and the remainder divided equally.
MAY
25
280
J
ormat Tools Add-ons Help
Normal text
Arial
Bb https://learn-us-east-1-prod-fleet02...
G
-
1
71985
tv
Transcribed Image Text:Bb https://learn-us-east-1-prod-fleet02... Bb https://learn-us-east- Last edit was seconds ago -1 18 + BIU EEEE 1 2 3 4 5 6 L BUS 208 - Principles of Accounting II Chapter 12 Karen Smith and Abby Jones formed a partnership, investing $250,000 and $125,000, respectively. Determine their participation in the year's net income of $420,000 under each of the following independent assumptions. Please show your calculations. a. No agreement concerning division of net income. b. Divided in the ratio of original capital investment. c. Interest at the rate of 4% allowed on original investments and the remainder divided in the ratio of 4:1. X d. Salary allowances of $50,000 and $60,000, respectively, and the remainder divided equally. e. Allowance of interest at the rate of 5% on original investments, salary allowances of $40,000 and $80,000 respectively and the remainder divided equally. MAY 25 280 J ormat Tools Add-ons Help Normal text Arial Bb https://learn-us-east-1-prod-fleet02... G - 1 71985 tv
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