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Dividing Partnership Income. Beau Dawson and Willow McDonald formed a partnership, investing $62,500 and $187,500, respectively. Determine their participation in the year's net income of $275,000 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 $50,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 6% on original investments, salary allowances of $38,000 and $50,000, respectively, and the remainder divided equally. Dawson McDonald 137,500 ✓ 206,2 ✔ 167,250 143,500 a. b. C. d. e. 137,500 ✔ 68,750 ✔ 107,750 ✔ 131,500 ✔ 263,750 X

Dividing Partnership Income. Beau Dawson and Willow McDonald formed a partnership, investing $62,500 and $187,500, respectively. Determine their participation in the year's net income of $275,000 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 $50,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 6% on original investments, salary allowances of $38,000 and $50,000, respectively, and the remainder divided equally. Dawson McDonald 137,500 ✓ 206,2 ✔ 167,250 143,500 a. b. C. d. e. 137,500 ✔ 68,750 ✔ 107,750 ✔ 131,500 ✔ 263,750 X

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Dividing Partnership Income. Beau Dawson and Willow McDonald formed a partnership, Investing $62,500 and $187,500, respectively. Determine their participation in the year's net income of $275,000 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 $50,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 6% on original investments, salary allowances of $38,000 and $50,000, respectively, and the remainder divided equally. Dawson McDonald 137,500 ✔ 137,500✔ 68,750 ✔ 107,750 ✔ 131,500 ✔ 263,750 X b. C. d. e 206,2 ✔ 167,250 ✓ 143,500
Transcribed Image Text:Dividing Partnership Income. Beau Dawson and Willow McDonald formed a partnership, Investing $62,500 and $187,500, respectively. Determine their participation in the year's net income of $275,000 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 $50,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 6% on original investments, salary allowances of $38,000 and $50,000, respectively, and the remainder divided equally. Dawson McDonald 137,500 ✔ 137,500✔ 68,750 ✔ 107,750 ✔ 131,500 ✔ 263,750 X b. C. d. e 206,2 ✔ 167,250 ✓ 143,500
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