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Emmett and Sierra formed a partnership dividing income as follows: 1. Annual salary allowance to Emmett of $48,000 2. Interest of 8% on each partners
Emmett and Sierra formed a partnership dividing income as follows:
1. Annual salary allowance to Emmett of $48,000
2. Interest of 8% on each partners capital balance on January 1
3. Any remaining net income divided equally
Emmett had $25,000 in his capital account on January 1 and Sierra had $140,000 in her capital account on January 1. Net income for the year was $200,000.
How much of the $200,000 net income should be distributed to Emmett? Show your work.
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