Reference no: EM132749882
Dividing Partnership Income
Beau Dawson and Willow McDonald formed a partnership, investing $276,000 and $92,000, respectively.
Problem 1: Determine their participation in the year's net income of $136,000 under each of the following independent assumptions:
a. No agreement concerning division of net income.
b. Divided in the ratio of original capital investment.
c. Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:3.
d. Salary allowances of $47,000 and $59,000, respectively, and the balance divided equally.
e. Allowance of interest at the rate of 5% on original investments, salary allowances of $47,000 and $59,000, respectively, and the remainder divided equally.
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