12.3

Dividing Partnership Income

Nicole Murphy and Ashley Drake formed a partnership, investing $270,000 and $90,000, respectively.

Determine their participation in the year's net income of $350,000 under each of the following independent assumptions:

No agreement concerning division of net income.

Divided in the ratio of original capital investment.

Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:3.

Salary allowances of $40,000 and $50,000, respectively, and the balance divided equally.

Allowance of interest at the rate of 5% on original investments, salary allowances of $40,000 and $50,000, respectively, and the remainder divided equally.

	Murphy	Drake
(a)	$	$
(b)	$	$
(c)	$	$
(d)	$	$
(e)	$	$