Question
12-2 eBook Show Me How Question Content Area Dividing Partnership Income Morrison and Greene have decided to form a partnership. They have agreed that Morrison
12-2
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Show Me How
Question Content Area
Dividing Partnership Income
Morrison and Greene have decided to form a partnership. They have agreed that Morrison is to invest $165,000 and that Greene is to invest $55,000. Morrison is to devote one-half time to the business, and Greene is to devote full time. The following plans for the division of income are being considered:
Equal division.
In the ratio of original investments.
In the ratio of time devoted to the business.
Interest of 5% on original investments and the remainder equally
Interest of 5% on original investments, salary allowances of $60,000 to Morrison and $85,000 to Greene, and the remainder equally
Plan (e), except that Greene is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances
Required:
For each plan, determine the division of the net income under each of the following assumptions: (1) net income of $133,000 and (2) net income of $210,000. Round answers to the nearest whole dollar.
(1) | (2) | |||||||
$133,000 | $210,000 | |||||||
Plan | Morrison | Greene | Morrison | Greene | ||||
a. | $fill in the blank 1 | $fill in the blank 2 | $fill in the blank 3 | $fill in the blank 4 | ||||
b. | $fill in the blank 5 | $fill in the blank 6 | $fill in the blank 7 | $fill in the blank 8 | ||||
c. | $fill in the blank 9 | $fill in the blank 10 | $fill in the blank 11 | $fill in the blank 12 | ||||
d. | $fill in the blank 13 | $fill in the blank 14 | $fill in the blank 15 | $fill in the blank 16 | ||||
e. | $fill in the blank 17 | $fill in the blank 18 | $fill in the blank 19 | $fill in the blank 20 | ||||
f. | $fill in the blank 21 | $fill in the blank 22 | $fill in the blank 23 | $fill in the blank 24 |
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