Dagnachew and Firdu formed a partnership. Dagnachew invested Birr 90,000 and Firdu nvested Birr 60,000. Dagnachew is to devote one-bulf time to the business while Firdu is to devote full time. The following plans for the division of income are being considered: 1. equally Problem Seven: 2. in the ratio of original investments 3. in the ratio of time devoted to the business 4. Interest of 12% on original investments and the reminder equally. 5. Interest of 12% on original investments, salaries of Birr 10,000 to Dagnachew and Bi 20,000 to Firdu, and the remainder equally, 6. The same as in #5 except that Dagnachew is also to be allowed a bonus equal to 25% of the amount by which net income exceeds salary allowances. Required: Determine the division of income to Dagnachew and Firdu under each plan assuming the partnership of Danagnachew and Firdu earned a net income of: a) Birr 32,000 b) Birr 150,000
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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