Question
Dividing Partnership Net Income Required: Steve Prince and Chelsy Bernard formed a partnership, dividing income as follows: Annual salary allowance to Bernard of $139,200. Interest
Dividing Partnership Net Income
Required:
Steve Prince and Chelsy Bernard formed a partnership, dividing income as follows:
- Annual salary allowance to Bernard of $139,200.
- Interest of 7% on each partner's capital balance on January 1.
- Any remaining net income divided to Prince and Bernard, 1:2.
Prince and Bernard had $45,000 and $81,000, respectively, in their January 1 capital balances. Net income for the year was $240,000. How much is distributed to Prince and Bernard?
Note: Compute partnership share.
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Audit Sampling An Introduction
Authors: Dan M. Guy, D. R. Carmichael, O. Ray Whittington
5th Edition
047137590X, 978-0471375906
