The partnership agreement of Dan, Hen, and Bai provides that profits are to be divided as follows: Bai receives a salary of $24,000 and Hen receives a salary of $18,000 for the time spent in the business; All partners receive 10% interest on average capital balances; Remaining profits and losses are divided equally among the three partners. On January 1, 2021, the capital balances were Dan $200,000; Hen, $160,000; and Bai, $150,000. Dan invested an additional $40,000 on July 1 and withdrew $40,000 on October 1. Hen and Bai had drawings of $18,000 and $24,000, respectively during the year. The Net Income of the partnership is $28,000. 1) What was Dan's total share of Net Income for 2021? 2) What was Hen's total share of Net Income for 2021? 3) What was Bai's total share of Net Income for 2021?
The
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Bai receives a salary of $24,000 and Hen receives a salary of $18,000 for the time spent in
the business;
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All partners receive 10% interest on average capital balances;
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Remaining
profits and losses are divided equally among the three partners.
On January 1, 2021, the capital balances were Dan $200,000; Hen, $160,000; and Bai, $150,000. Dan invested an additional $40,000 on July 1 and withdrew $40,000 on October 1. Hen and Bai had drawings of $18,000 and $24,000, respectively during the year.
The Net Income of the partnership is $28,000.
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1) What was Dan's total share of Net Income for 2021?
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2) What was Hen's total share of Net Income for 2021?
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3) What was Bai's total share of Net Income for 2021?
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