Reference no: EM132631998
Question - Thinking and Inquiry
1) A, B, and C formed a partnership. When applicable, the partnership agreement states that salaries are to be paid first, interest on partners' capital second, with the remainder to be divided equally. The cases below are independent. Show your work, marks will not be allocated for final answers only.
1. Net loss for the year was $60,000. Neither salaries nor interest on capital balances is to be paid.
Calculate the Partner A's share of net loss?
2. Net income for the year was $155,000. The partnership agreement provides for salaries of $25,000 for A and $10,000 for B, with no interest paid on capital balances.
Calculate the Partner A's share of net income?
3. Net income for the year was $150,000. The partnership agreement makes no provision for salaries but provides for 5% interest on January 1 capital balances. These balances were $60,000, $50,000, and $40,000 for A, B, and C, respectively.
Calculate the Partner A's share of net income?
4. Net income for the year was $93,000. The partnership agreement provides for a $9,000 salary for B and 10% interest on January 1 capital balances. These balances were $30,000 for each partner on January 1.
Calculate the Partner A's share of net income?
5. Net income for the year was $800. The partnership agreement makes no provision for salaries but provides for 10% interest on January 1 capital balances. These balances were $15,000 for A and $25,000 for B and C.
Calculate the Partner A's share of net income?
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