Bill and bob formed a partnership on 1st january 2008 bill

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Reference no: EM13370507

Bill and Bob formed a partnership on 1st January, 2008. Bill contributed capital of $100,000. Bob contributed capital of $20,000 and agreed to arrange the firm full time. There were no withdrawals during 2008. The partnership agreement specifies that income is to be distributed as given: Bob is to be paid a salary of $2,000 per month; interest at 5 percent is to be paid on beginning capital balances; Bob is to receive a bonus of 10 percent; remaining profits or losses are to be shared in the ratio of 3:2 to Bill and Bob, correspondingly.

The partnership 2008 net income was $100,000.

Refer to the given information. Find amount of Bob's bonus if the bonus is to be evaluated on income before deducting salary and interest on capital accounts, but after the bonus?

A. $10,000
B. $9,091
C. $9,000
D. $11,111

Refer to above information. Consider Bob's bonus is $10,000, what is the amount of Bob's capital at the end of the year?
A. $79,000
B. $54,000
C. $30,000
D. $44,000

Reference no: EM13370507

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