Fred and Barney started a partnership. During Year 1, Fred invested $8000 in the business and Barney invested $16,500. The partnership agreement called for each partner to receive an annual distribution equal to $10% of his capital contribution. Any further earnings were to be retained in the business and divided equally between the partners. The partnership reported net income of $20,000 during Year 1. How will the $20,000 of net income be split between Fred and Barney respectively? (Hint: Consider both the cash withdrawals and allocation of remaining income.)

Fred

Barney

Group of answer choices

$

7975

$

7125

$

9575

$

10,425

$

8000

$

12,000

$

10,000

$

10,000