The partnership contract of Ray, Stan & Todd LLP provided that Ray was to receive a bonus equal to 20% of income and that the remaining income or loss was to be divided 40% each to Ray and Stan and 20% to Todd. Income of Ray, Stan & Todd LLP for 2005 (before the bonus) amounted to $127,200.

Explain two alternative ways in which the bonus provision might be interpreted, and prepare a working paper to compute the division of the $127,200 income of Ray, Stan & Todd LLP for 2005 under each interpretation.