Dividing Partnership Net IncomeSteve Queen and Chelsy Stevens formed a partnership, dividing income as follows:Annual salary allowance to Queen of $89,040.Interest of 7% on each partner's capital balance on January 1.Any remaining net income divided to Queen and Stevens, 1:2.Queen and Stevens had $69,000 and $93,000, respectively, in their January 1 capital balances. Net income for the year was $159,000.How much net income should be distributed to Queen and Stevens?Queen: fill in the blank 1 of 2$Stevens: fill in the blank 2 of 2$

The objective of the question is to calculate the distribution of net income between the partners…

Answered: Dividing Partnership Net Income Steve…

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 Net Income

Steve Queen and Chelsy Stevens formed a partnership, dividing income as follows:

Annual salary allowance to Queen of $89,040.
Interest of 7% on each partner's capital balance on January 1.
Any remaining net income divided to Queen and Stevens, 1:2.

Queen and Stevens had $69,000 and $93,000, respectively, in their January 1 capital balances. Net income for the year was $159,000.

How much net income should be distributed to Queen and Stevens?
Queen: fill in the blank 1 of 2$
Stevens: fill in the blank 2 of 2$

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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