Seth and Beth have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership inc following provisions regarding the division of net income: interest on original investment at 10%; salary allowances of $27,000 $18,000, respectively; and the remainder to be divided equally. How much of the net income of $42,000 is allocated to Seth? Oa. $0 Ob. $20,000 Oc. $32,000
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.
![Seth and Beth have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership include the
following provisions regarding the division of net income: interest on original investment at 10%; salary allowances of $27,000 and
$18,000, respectively; and the remainder to be divided equally. How much of the net income of $42,000 is allocated to Seth?
Oa. $0
Ob. $20,000
Oc. $32,000
Od. $23,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F15b447b9-5dd7-464f-9bff-2bdaea9ebab6%2F7725b0fa-d4ba-4c71-a13f-84e56a33ce77%2Fw6m3v2_processed.jpeg&w=3840&q=75)
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