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how do i calculate remainder to allocate?

how do i calculate remainder to allocate?

FINANCIAL ACCOUNTING
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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how do i calculate remainder to allocate?

The partnership agreement of Jones, King, and Lane provides for the annual allocation of the business's profit or loss in the following sequence: Jones, the managing partner, receives a bonus equal to 20 percent of the business's profit. • Each partner receives 13 percent interest on average capital investment. • Any residual profit or loss is divided equally. The average capital investments for 2021 were as follows: $ 150,000 300,000 450,000 Jones King Lane The partnership earned $90,000 net income for 2021. Prepare a schedule showing how the 2021 net income should be allocated to the partners. (Loss amounts should be indicated with a minus sign.) Jones King Lane Total Net income 2$ 90,000 Bonus 2$ 18,000 $ o $ (18,000) Interest 19,500 39,000 58,500 (117,000) $ (45,000) Remainder to allocate Total allocation $ 37,500 $ 39,000 $ 58,500 $ (45,000)
Transcribed Image Text:The partnership agreement of Jones, King, and Lane provides for the annual allocation of the business's profit or loss in the following sequence: Jones, the managing partner, receives a bonus equal to 20 percent of the business's profit. • Each partner receives 13 percent interest on average capital investment. • Any residual profit or loss is divided equally. The average capital investments for 2021 were as follows: $ 150,000 300,000 450,000 Jones King Lane The partnership earned $90,000 net income for 2021. Prepare a schedule showing how the 2021 net income should be allocated to the partners. (Loss amounts should be indicated with a minus sign.) Jones King Lane Total Net income 2$ 90,000 Bonus 2$ 18,000 $ o $ (18,000) Interest 19,500 39,000 58,500 (117,000) $ (45,000) Remainder to allocate Total allocation $ 37,500 $ 39,000 $ 58,500 $ (45,000)
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