CHAPTER $11$ Partnerships

Exercise $11-6$ Profit allocation in a partnership LO$3$

CHECK FIGURES: $1.$ Jensen: $$255,800$; Stafford: $$164,200$;$2.$ Jensen: $$(53,200)$; Stafford: $$(41,800)$

jensen and Stafford began a partnership to start a hardwood flooring installation business, by investing $$160,000$ and $$200,000,$ respectively. They agreed to share profits$/($losses$)$ by providing yearly salary allowances of $$150,000$ to Jensen and $$75,000$ to Stafford, $20\%$ interest allowances on their investments, and sharing the balance $3$:$2.$

Required

Determine each partner's share if the first$-$year profit was $$420,000.$

Independent of $(1),$ determine each partner's share if the first$-$year loss was $$95,000.$