The partnership agreement of Jones, King, and Lane provides for the annual allocation of the business's profit or loss in the following sequence: • Jones, the managing partner, receives a bonus equal to 15 percent of the business's profit. • Each partner receives 10 percent interest on average capital investment. • Any residual profit or loss is divided equally. The average capital investments for 2021 were as follows: Jones King Lane The partnership earned $84,000 net income for 2021. Prepare a schedule showing how the 2021 net income should be allocated to the partners. (Loss amounts should be indicated with a minus sign.) Net income Bonus Interest $ 190,000 380,000 570,000 Remainder to allocate Total allocation Jones King Lane Total

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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The partnership agreement of Jones, King, and Lane provides for the annual allocation of the business's profit or loss in the following
sequence:
• Jones, the managing partner, receives a bonus equal to 15 percent of the business's profit.
• Each partner receives 10 percent interest on average capital investment.
Any residual profit or loss is divided equally.
The average capital investments for 2021 were as follows:
Jones
King
Lane
The partnership earned $84,000 net income for 2021. Prepare a schedule showing how the 2021 net income should be allocated to
the partners. (Loss amounts should be indicated with a minus sign.)
Net income
Bonus
Interest
$ 190,000
380,000
570,000
Remainder to allocate
Total allocation
Jones
King
Lane
Total
Transcribed Image Text:The partnership agreement of Jones, King, and Lane provides for the annual allocation of the business's profit or loss in the following sequence: • Jones, the managing partner, receives a bonus equal to 15 percent of the business's profit. • Each partner receives 10 percent interest on average capital investment. Any residual profit or loss is divided equally. The average capital investments for 2021 were as follows: Jones King Lane The partnership earned $84,000 net income for 2021. Prepare a schedule showing how the 2021 net income should be allocated to the partners. (Loss amounts should be indicated with a minus sign.) Net income Bonus Interest $ 190,000 380,000 570,000 Remainder to allocate Total allocation Jones King Lane Total
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