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Morrison and Greene have decided to form a partnership. They have agreed that Morrison is to invest $267,000 and that Greene is to invest $89,000.
Morrison and Greene have decided to form a partnership. They have agreed that Morrison is to invest $267,000 and that Greene is to invest $89,000. 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:
- Interest of 5% on original investments, salary allowances of $45,000 to Morrison and $75,000 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 $178,000 and (2) net income of $225,000. Round answers to the nearest whole dollar.
(1) | (2) | |||||||
$178,000 | $225,000 | |||||||
Plan | Morrison | Greene | Morrison | Greene |
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