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Desmond Drury and Ty Wilkins have decided to form a partnership. They have agreed that Drury is to invest $10, 200 and that Wilkins is
Desmond Drury and Ty Wilkins have decided to form a partnership. They have agreed that Drury is to invest $10, 200 and that Wilkins is to invest $40, 800. Drury is to devote full time to the business, and Wilkins is to devote one-half time. The following plans for the division of income are being considered: a. Equal division b. In the ratio of original investments c. In the ratio of time devoted to the business d. Interest of 10% on original investments and the remainder in the ratio of 3: 2. Interest of 10% on original investments, salary allowances of $34, 600 to Drury and $17, 300 to Wilkins, and the remainder equally f. Plan (e), except that Wilkins 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 $153,000 and (2) net income of $67, 200
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