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What was the total partnership income

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Mark and Johnny are partners who share profits and losses in the ratio of 60%; 40% respectively. Mark's salary is $120,000 and Johnny is $60,000. The partners also paid interest on their average capital balances.

Problem 1: In 2020, Mark received $60,000 of interest and Johnny, $24,000. The profit and loss allocation is determined after deduction for the salary and interest payments. If Johnny's share in the residual income (income after deducting salaries and interest) was $120,000 in 2020, what was the total partnership income?

Option a. 384,000

Option b. 690,000

Option c. 774,000

Option d. 564,000

Reference no: EM132796089

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