Dividing Partnership Income Dylan Howell and Demond Nickles have decided to form a partnership. They have agreed that Howell is to invest $50,000 and that Nickles is to invest $75,000. Howell is to devote full time to the business, and Nickles 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. e. Interest of 10% on original investments, salary allowances of $38,000 to Howell and $19,000 to Nickles, and the remainder equally. f. Plan (e), except that Howell 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 $420,000 and (2) net income of $150,000. (1) $420,000 Nickles (2) $150,000 Plan Howell Howell Nickles a. 210,000 210,000 75,000 75,000 b. $315,000 X $ 105,000 $ 112,500 X 37,500 X C. $ 140,000 X $ 280,000 X 50,000 X 100,000 X d. 5,000 X 7,500 X 5,000 X 7,500 X e. 5,000 X 7,500 X 5,000 X 7,500 X f.