Dividing Partnership Income

Desmond Drury and Ty Wilkins have decided to form a partnership. They have agreed that Drury is to invest $70,800 and that Wilkins is to invest $17,700. 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:

Equal division.

In the ratio of original investments.

In the ratio of time devoted to the business.

Interest of 10% on original investments and the remainder in the ratio of 3:2.

Interest of 10% on original investments, salary allowances of $60,200 to Drury and $30,100 to Wilkins, and the remainder equally.

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 $265,500 and (2) net income of $116,700.

	(1)				(2)
	$265,500				$116,700
Plan		Drury		Wilkins		Drury		Wilkins
a.	$		$		$		$
b.	$		$		$		$
c.	$		$		$		$
d.	$		$		$		$
e.	$		$		$		$
f.	$		$		$		$