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Assume Bert and Ernie have capital balances of $20,000 and $80,000, respectively. Bert is actively involved in running the business so he will receive a

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Assume Bert and Ernie have capital balances of $20,000 and $80,000, respectively. Bert is actively involved in running the business so he will receive a salary allowance of $50,000. Ernie, on the o hand, is the financial backing for the business. Therefore, Ernie will receive an interest allowance of 12 percent on his beginning capital balance. The remainder will be divided in the ratio of the partners beginning capital balances. If the partnership earns a profit of $125,000, how would profits be allocateo between the partners? Now assume that the partnership expects a profit of only $10,000

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