Dividing Partnership Income Morrison and Greene have decided to form a partnership. They have agreed that Morrison is to invest $177,000 and that Greene is to invest $59,000. Morrison is to devote one-half time to the business, and Greene is to devote full 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 6% on original Investments and the remainder equally e. Interest of 6% on original investments, salary allowances of $45,000 to Morrison and $75,000 to Greene, and the remainder equally f. Plan (e), except that Greene 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 $115,000 and (2) net income of $225,000. Round answers to the nearest whole dollar. (1) (2) $115,000 $225,000 Plan Morrison Greene Morrison Greene $ $ $ a. $ 57,500 57,500 112,500 112,500 $ $ $ b. 86,250 28,750 168,750 56,250 $ c. 38,333 76,667 75,000 150,000 $ $ d. $ 116,040 61,040 53,960 108,960 $ $ $ e. $ 101,040 48,435 x 66,565 x 123,960 $ $ $ $ f. f. 48,435 X 66,565 X 90,540 134,460 Feedback