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Determine their participation in the year's net income of $10- 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 d. Salary allowances of $36,000 and $45,000, respectively, a e. Allowance of interest at the rate of 6% on original investm and the remainder divided equally.

Determine their participation in the year's net income of $10- 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 d. Salary allowances of $36,000 and $45,000, respectively, a e. Allowance of interest at the rate of 6% on original investm and the remainder divided equally.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
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 $72,500 and $217,500, respectively. Determine their participation in the year's net income of $108,000 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 $45,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 6% on original investments, salary allowances of $36,000 and $45,000, respectively, and the remainder divided equally. Dawson McDonald a. b. C. d. 00000
Transcribed Image Text:Dividing Partnership Income Beau Dawson and Willow McDonald formed a partnership, investing $72,500 and $217,500, respectively. Determine their participation in the year's net income of $108,000 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 $45,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 6% on original investments, salary allowances of $36,000 and $45,000, respectively, and the remainder divided equally. Dawson McDonald a. b. C. d. 00000
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