Question
Bill Beck, Bruce Beck, and Barb Beck formed the BBB Partnership by making capital contributions of $69,300, $269,500, and $431,200, respectively. They predict annual partnership
Bill Beck, Bruce Beck, and Barb Beck formed the BBB Partnership by making capital contributions of $69,300, $269,500, and $431,200, respectively. They predict annual partnership net income of $460,500 and are considering the following alternative plans of sharing income and loss: (a) equally; (b) in the ratio of their initial capital investments; or (c) salary allowances of $80,800 to Bill, $60,600 to Bruce, and $91,000 to Barb; interest allowances of 10% on their initial capital investments; and the balance shared as follows: 20% to Bill, 40% to Bruce, and 40% to Barb.
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