son and Greene have decided to form a partnership. They have agreed that Morrison is to invest $279,000 and that Greene is to invest $93,000. Morrison is to devote one-half time to the business, and Greene is to devote full time. The following plans for the division of income are being considered qual division. the ratio of original investments. the ratio of time devoted to the business. terest of 5% on original investments and the remainder equally terest of 5% on original investments, salary allowances of $50,000 to Morrison and $90,000 to Greene, and the remainder equally an (e), except that Greene is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances wired: ach plan, determine the division of the net income under each of the following assumptions: (1) net income of $166,000 and (2) net income of $240,000. Round answers to the nearest whole dollar. (1) (2) $166,000 $240,000 Morrison Greene Morrison Greene 83,000 v 83,000 v 120,000 v 120,000 V

son and Greene have decided to form a partnership. They have agreed that Morrison is to invest $279,000 and that Greene is to invest $93,000. Morrison is to devote one-half time to the business, and Greene is to devote full time. The following plans for the division of income are being considered qual division. the ratio of original investments. the ratio of time devoted to the business. terest of 5% on original investments and the remainder equally terest of 5% on original investments, salary allowances of $50,000 to Morrison and $90,000 to Greene, and the remainder equally an (e), except that Greene is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances wired: ach plan, determine the division of the net income under each of the following assumptions: (1) net income of $166,000 and (2) net income of $240,000. Round answers to the nearest whole dollar. (1) (2) $166,000 $240,000 Morrison Greene Morrison Greene 83,000 v 83,000 v 120,000 v 120,000 V

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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For Industry H, determine each partner's share of income assuming the partners agree to share income by giving a $67,700 per year salary allowance to Price, a $126,100 per year salary allowance to Waterhouse, a $113,700 per year salary allowance to Coopers, a 15% interest on their initial capital investments, and the remaining balance shared equally. (Enter all allowances as positive values. Enter losses as negative values.) Important! Be sure to click the correct Industry at the top of the dashboard. Net income (loss) Salary allowances Balance of income (loss) Interest allowances Balance of income (loss) Balance allocated equally Balance of income (loss) Shares of each partner Initial partnership investments Net income Allocation of Partnership Income Price Total net income Total 0 Waterhouse $ $ PRICE, WATERHOUSE, AND COOPERS Statement of Partners' Equity For Year Ended December 31 Price Coopers 0 0 Waterhouse 0 0 0 $ For Industry H, prepare a statement of partners' equity for the…
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