Determine the amount of net income

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Karen Rhea and Wayne Sellevaeg decided to form a partnership on July 1, 20-1. Rhea invested $100,000 and Sellevaeg invested $50,000. For the fiscal year ended June 30, 20-2, a net income of $90,000 was earned. Determine the amount of net income that Rhea and Sellevaeg would receive under each of the following independent assumptions:

  1. There is no agreement concerning the distribution of net income.

  2. Each partner is to receive 10% interest on their original investment. The remaining net income is to be divided equally.

  3. Rhea and Sellevaeg are to receive a salary allowance of $30,000 and $40,000, respectively. The remaining ret income is to be divided equally.

  4. Each partner is to receive 10% interest on their original investment. Rhea and Sellevaeg are to receive a salary allowance of $30,000 and $40,000, respectively. The remaining net income is to be divided as follows: Rhea, 40% and Sellevaeg, 60%.

Reference no: EM13496143

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