Profit and loss agreement

Assignment Help Accounting Basics

Reference no: EM13124086

Partners A and B have a profit and loss agreement with the following provisions: salaries of $41,600 and $38,400 for A and B, respectively; a bonus to A of 10% of net income after salaries and bonus; and interest of 10% on average capital balances of $20,000 and $35,000 for A and B, respectively. One-third of any remaining profits are allocated to A and the balance to B. If the partnership had a net income of $36,000, how much should be allocated to Partner A, assuming that the provisions of the profit and loss agreement are ranked by order of priority starting with salaries?

a) $12,000

b) $18,000

c) $18,720

d) $41,600

Reference no: EM13124086

Questions Cloud

Necessary and sufficient conditions for inequalities : When graphing a linear inequality, how do you know if the inequality represents the area above the line? What are the necessary and sufficient conditions for inequalities to represent an area in the first quadrant?

What is the average wait time for production : Vases take an average of 15 minutes to manufacture, and the machine that produces the vases has an annual capacity to run 4,000 hours. What is the average wait time for production?

Solve the linear problem graphically : Solve this linear problem graphically and determine optimal quanitities of A, B, and value of Z.

Explain how much in personal taxes will ernest need to pay : Ernest, an individual, receives $100 from Vernon Corp. in dividends and is in the 28% tax bracket. Vernon Corp. already paid corporate taxes on the $100 at a 20% tax rate. Explain how much in personal taxes will Ernest need to pay?

Profit and loss agreement : Partners A and B have a profit and loss agreement with the following provisions: salaries of $41,600 and $38,400 for A and B, respectively; a bonus to A of 10% of net income after salaries and bonus; and interest of 10% on average capital balances..

Estimating system of equations : Discuss an example of a way you use, or can use, a system of equations in your life? Describe a situation where a system of equations has no solution, and prove it mathematically.

Explain what is overall satisfaction with bank of america : The response on a scale from 1 to 10 to the question: "Considering all the business you do with Bank of America, what is your overall satisfaction with Bank of America?

Group g onto itself is called an automorphism of g : Prove that the mapping a(g) = g^-1 for all g in G is an automorphism if and only if G is Abelian. An isomorphism from a group G onto itself is called an automorphism of G.

Coin combination probability : Suppose you have 50 American coins totaling exactly $1. This includes at least one quarter, and may contain nickels, dimes, and/or pennies.

User Account

All Pages