Dividing partnership income Carmelo Fernandez and Bobby Morett formed a partnership, investing $70,000 and $210,000, 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 5% allowed on original investments and the remainder divided in the ratio of 2:3. d. Salary allowances of $38,000 and $49,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 5% on original investments, salary allowances of $38,000 and $49,000, respectively, and the remainder divided equally. a. b. C. d. e. Fernandez $ $ $ $ Morett

Dividing partnership income Carmelo Fernandez and Bobby Morett formed a partnership, investing $70,000 and $210,000, 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 5% allowed on original investments and the remainder divided in the ratio of 2:3. d. Salary allowances of $38,000 and $49,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 5% on original investments, salary allowances of $38,000 and $49,000, respectively, and the remainder divided equally. a. b. C. d. e. Fernandez $ $ $ $ Morett

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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Question

<
Dividing partnership income
Carmelo Fernandez and Bobby Morett formed a partnership, investing $70,000 and $210,000, 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 5% allowed on original investments and the remainder divided in the ratio of 2:3.
d. Salary allowances of $38,000 and $49,000, respectively, and the balance divided equally.
e. Allowance of interest at the rate of 5% on original investments, salary allowances of $38,000 and $49,000, respectively, and the remainder divided
equally.
d.
b.
C.
d.
e.
$
Fernandez
Morett

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