Question-based on partnership I have tried it but incorrect, the first 2 answers are wrong. Thanks for the help. The partnership agreement of Alix, Gise, and Bosco provides for the following income ratio: (a) Alix,the managing partner, receives a salary allowance of $108900, (b) each partner receives 15% intereston average capital investment, and (c) remaining net income or loss is divided equally. The averagecapital investments for the year were: Alix $607000, Gise $1100000, and Bosco $1810000. Ifpartnership net income is $549000, the amount allocated to Alix should be$91050.$199950.$175850.O $170800.

Answered: The partnership agreement of Alix,…

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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Question-based on partnership

I have tried it but incorrect, the first 2 answers are wrong.

Thanks for the help.

The partnership agreement of Alix, Gise, and Bosco provides for the following income ratio: (a) Alix,
the managing partner, receives a salary allowance of $108900, (b) each partner receives 15% interest
on average capital investment, and (c) remaining net income or loss is divided equally. The average
capital investments for the year were: Alix $607000, Gise $1100000, and Bosco $1810000. If
partnership net income is $549000, the amount allocated to Alix should be
$91050.
$199950.
$175850.
O $170800.

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

Expert Solution

Step 1

Given that:

Salary Allowance to Alix = $108900

Interest on Capital = 15%

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