Dividing partnership income Dahl and Westhoff have decided to form a partnership. They have agreed that Dahl is to invest $400,000 and that Westhoff is to invest $100,000. Dahl is to devote one-third time to the business, and Westhoff is to devote two-thirds time. The following plans for the division of income are being considered: a. Equal division b. In the ratio of original investments c. In the ratio of time devoted to the business d. Interest of 5% on original investments and the remainder equally e. Interest of 5% on original investments, salary allowances of $80,000 to Dahl and $160,000 to Westhoff, and the remainder equally f. Plan (e), except that Westhoff is also to be allowed a bonus of $50,000 if net income exceeds $200,000 Required: For each plan, determine the division of the net income under each of the following assumptions: (1) net income of $300,000 and (2) net income of $750,000. Round answers to the nearest whole dollar. (1) $300,000 (2) $750,000 (2) $750,000 (1) $300,000 Westhoff Dahl Dahl Westhoff Plan a. b. C. d. e. f. $ $ $ Show Me How $ $ $ $ $ $ $
Dividing partnership income Dahl and Westhoff have decided to form a partnership. They have agreed that Dahl is to invest $400,000 and that Westhoff is to invest $100,000. Dahl is to devote one-third time to the business, and Westhoff is to devote two-thirds time. The following plans for the division of income are being considered: a. Equal division b. In the ratio of original investments c. In the ratio of time devoted to the business d. Interest of 5% on original investments and the remainder equally e. Interest of 5% on original investments, salary allowances of $80,000 to Dahl and $160,000 to Westhoff, and the remainder equally f. Plan (e), except that Westhoff is also to be allowed a bonus of $50,000 if net income exceeds $200,000 Required: For each plan, determine the division of the net income under each of the following assumptions: (1) net income of $300,000 and (2) net income of $750,000. Round answers to the nearest whole dollar. (1) $300,000 (2) $750,000 (2) $750,000 (1) $300,000 Westhoff Dahl Dahl Westhoff Plan a. b. C. d. e. f. $ $ $ Show Me How $ $ $ $ $ $ $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Dividing partnership income
Dahl and Westhoff have decided to form a partnership. They have agreed that Dahl is to invest $400,000 and that Westhoff is to invest $100,000. Dahl is to devote one-third time to the business, and Westhoff is to
devote two-thirds time. The following plans for the division of income are being considered:
a. Equal division
b. In the ratio of original investments
c. In the ratio of time devoted to the business
d. Interest of 5% on original investments and the remainder equally
e. Interest of 5% on original investments, salary allowances of $80,000 to Dahl and $160,000 to Westhoff, and the remainder equally
f. Plan (e), except that Westhoff is also to be allowed a bonus of $50,000 if net income exceeds $200,000
Required:
For each plan, determine the division of the net income under each of the following assumptions: (1) net income of $300,000 and (2) net income of $750,000. Round answers to the nearest whole dollar.
(2) $750,000
(1) $300,000
Westhoff
(2) $750,000
Westhoff
Dahl
Plan
a.
b.
C.
d.
e.
f.
(1) $300,000
Dahl
$
$
$
$
$
$
Show Me How
$
$
$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6837f41f-646e-47ee-b8d9-c59c1d1a11b6%2F2a7f159d-4731-4e0c-ba2b-47dd05dba636%2Fxm11v2_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Dividing partnership income
Dahl and Westhoff have decided to form a partnership. They have agreed that Dahl is to invest $400,000 and that Westhoff is to invest $100,000. Dahl is to devote one-third time to the business, and Westhoff is to
devote two-thirds time. The following plans for the division of income are being considered:
a. Equal division
b. In the ratio of original investments
c. In the ratio of time devoted to the business
d. Interest of 5% on original investments and the remainder equally
e. Interest of 5% on original investments, salary allowances of $80,000 to Dahl and $160,000 to Westhoff, and the remainder equally
f. Plan (e), except that Westhoff is also to be allowed a bonus of $50,000 if net income exceeds $200,000
Required:
For each plan, determine the division of the net income under each of the following assumptions: (1) net income of $300,000 and (2) net income of $750,000. Round answers to the nearest whole dollar.
(2) $750,000
(1) $300,000
Westhoff
(2) $750,000
Westhoff
Dahl
Plan
a.
b.
C.
d.
e.
f.
(1) $300,000
Dahl
$
$
$
$
$
$
Show Me How
$
$
$
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