Lori and Peter enter into a partnership and decide to share profits and losses as follows: 1 The first allocation is a salary allowance with Lori receiving $16,000 and Peter receiving $18,000. 2 The second allocation is 15% of the partners capital balances at year end. On December 31, 2019 the capital balances for Lori and Peter are $90,000 and $20,000, respectively. 3. Any remaining profit or loss is allocated equally. For the year ending December 31, 2019, the partnership reported net Income of $55,000 What is Lori's share of the net income? A) $29,500 B) $20,250 C) $31,750 D) $23,250
Lori and Peter enter into a partnership and decide to share profits and losses as follows: 1 The first allocation is a salary allowance with Lori receiving $16,000 and Peter receiving $18,000. 2 The second allocation is 15% of the partners capital balances at year end. On December 31, 2019 the capital balances for Lori and Peter are $90,000 and $20,000, respectively. 3. Any remaining profit or loss is allocated equally. For the year ending December 31, 2019, the partnership reported net Income of $55,000 What is Lori's share of the net income? A) $29,500 B) $20,250 C) $31,750 D) $23,250
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Lori and Peter enter into a
1 The first allocation is a salary allowance with Lori receiving $16,000 and Peter receiving $18,000.
2 The second allocation is 15% of the partners capital balances at year end. On December 31, 2019 the capital balances for Lori and Peter are $90,000 and $20,000, respectively.
3. Any remaining profit or loss is allocated equally. For the year ending December 31, 2019, the partnership reported net Income of $55,000 What is Lori's share of the net income?
A) $29,500
B) $20,250
C) $31,750
D) $23,250
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education