Phox and Ranch have decided to form a partnership. They are in the process of agreeing on how the profits/losses will be divided. Assume that the company is anticipating net income of $80,000 for the first time period. Determine Phox's share of the net income if the partner's agree on an interest allowance of 10% on the original investments (Phox invested $20,000 and Ranch invested $30,000) and the remainder equally. Phox Ranch Total Interest Allowances Remainder 1:1 _____ ______ ______ Totals ? 80,000 Group of answer choices $40,000 $39,500 $30,000 $2,000
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.
Phox and Ranch have decided to form a
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|
Phox |
Ranch |
Total |
|
Interest Allowances |
|
|
|
|
Remainder 1:1 |
_____ |
______ |
______ |
|
Totals |
? |
|
80,000 |
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