Dallas and Weiss formed a partnership to manage rental properties, by investing $144,000 and $216,000, respectively. During
Question:
Dallas and Weiss formed a partnership to manage rental properties, by investing $144,000 and $216,000, respectively. During its first year, the partnership recorded profit of $469,000.
Required
Prepare calculations showing how the profit should be allocated to the partners under each of the following plans for sharing profit and losses:
a. The partners failed to agree on a method of sharing profit.
b. The partners agreed to share profits and losses in proportion to their initial investments.
c. The partners agreed to share profit by allowing a $151,000 per year salary allowance to Dallas, an $81,000 per year salary allowance to Weiss, 20% interest on their initial investments, and sharing the balance equally.
PartnershipA legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
Step by Step Answer:
Fundamental Accounting Principles Volume II
ISBN: 978-1260305838
16th Canadian edition
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann