Question
Dividing Partnership Income Morrison and Greene have decided to form a partnership. They have agreed that Morrison is to invest $252,000 and that Greene is
Dividing Partnership Income Morrison and Greene have decided to form a partnership. They have agreed that Morrison is to invest $252,000 and that Greene is to invest $84,000. 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: Equal division. In the ratio of original investments. In the ratio of time devoted to the business. Interest of 5% on original investments and the remainder equally Interest of 5% on original investments, salary allowances of $60,000 to Morrison and $70,000 to Greene, and the remainder equally 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 $124,000 and (2) net income of $210,000. Round answers to the nearest whole dollar.
(1) | (2) | |||||||
$124,000 | $210,000 | |||||||
Plan | Morrison | Greene | Morrison | Greene |
a. $ $ $ $b. $ $ $ $c. $ $ $ $d. $ $ $ $e. $ $ $ $f. $ $ $ $
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