Emmett and Sierra formed a partnership dividing income as follows: Annual salary allowance to Emmett of $42,300 Interest of 8% on each partner's capital balance on January 1 Any remaining net income divided equally. Emmett and Sierra had $33,600 and $128,200, respectively in their January 1 capital balances. Net income for the year was $214,500. How much net income should be distributed to Emmett?
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is 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, drawings of a partner, etc.
Emmett and Sierra formed a
- Annual salary allowance to Emmett of $42,300
- Interest of 8% on each partner's capital balance on January 1
- Any remaining net income divided equally.
Emmett and Sierra had $33,600 and $128,200, respectively in their January 1 capital balances. Net income for the year was $214,500.
How much net income should be distributed to Emmett?
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