Determine the division of the net income

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Reference no: EM133379807

Morrison and Greene have decided to form a partnership. They have agreed that Morrison is to invest $180,000 and that Greene is to invest $60,000. Morrison is to devote one-half time to the business, and Greene is to devote full time. The following plans for the division of income are being considered:

Equal division.
In the ratio of original investments.
In the ratio of time devoted to the business.
Interest of 6% on original investments and the remainder equally
Interest of 6% on original investments, salary allowances of $45,000 to Morrison and $80,000 to Greene, and the remainder equally
Plan (e), except that Greene is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances

Required:

For each plan, determine the division of the net income under each of the following assumptions: (1) net income of $154,000 and (2) net income of $220,000. Round answers to the nearest whole dollar.

Reference no: EM133379807

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