Determine the appropriate division of net income\

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Reference no: EM132793997

Partnership Accounts The beginning capital balances in the partnership partnership agreement contains the following provisions for the division of net income:

1. Partners are allowed 12% interest on their beginning capital balances.
2. B and C each have salary allowances of 50,000.
3. A will be paid commission @ 3% of net income.
4. The drawings made by each partners were A = 40,000, B = 80,000 and C = 60,000. The partners had decided to charge same percentage of interest on drawings as allowed for interest on capitals.
5. Remaining profits and losses are shared among the three partners in the ratio of their beginning
capital balances.

Required:

Problem 1: Determine the appropriate division of net income of $ 300,000 among the partners and prepare the capital accounts of all the partners.

Reference no: EM132793997

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