Question
Lisa, laura , and Carol formed the LLc Partnership. They agreed to share profits in a 3:1:2 ratio. However, they also agreed that each partner
Lisa, laura , and Carol formed the LLc Partnership. They agreed to share profits in a 3:1:2 ratio. However, they also agreed that each partner would receive a 5% interest on average capital balances, and they agreed to monthly salary allowances of $3,750 for laura and $3,000 for carol. Average capital balances were as follows:
lisa 300,000
laura 240,000
Carol 180,000
Required:
a) Compute the net income (loss) that will be allocated to each partner assuming the partnership incurred a $27,000 net operating loss. Prepare a schedule in good form to support your answer and to report to the partnership.
b) Compute the net income (loss) that will be allocated to each partner assuming the partnership incurred a $175,000 net operating income. Prepare a schedule in good form to support your answer and to report to the partnership.
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