Dividing Partnership Income Beau Dawson and Willow McDonald formed a partnership, investing $225,000 and $75,000, respectively. Determine their participation in the year's net income of $270,000 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 6% 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 6% on original investments, salary allowances of $38,000 and $47,000, respectively, and the remainder divided equally. Dawson a. b. C. d. e. $135,000 ✓ $ 202,500✔ $ 108,000 X $ 130,500 ✓ $ 136,500 X McDonald 135,000 67,500 162,000 X 139,500 ✓ $145,500 X

Dividing Partnership Income Beau Dawson and Willow McDonald formed a partnership, investing $225,000 and $75,000, respectively. Determine their participation in the year's net income of $270,000 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 6% 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 6% on original investments, salary allowances of $38,000 and $47,000, respectively, and the remainder divided equally. Dawson a. b. C. d. e. $135,000 ✓ $ 202,500✔ $ 108,000 X $ 130,500 ✓ $ 136,500 X McDonald 135,000 67,500 162,000 X 139,500 ✓ $145,500 X

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter19: Accounting For Partnerships

Section: Chapter Questions

Problem 2SEA

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