Partners Sherif and Rafik receive a yearly salary of $100,000 and $120,000, respectively, plus interest of 4 percent on weighted average capital. Partnership income for the year, before any distributions to partners, is $300,000. Weighted average capital balances for Sherif and Rafik are $525,000 and $425,000, respectively. Assume full implementation.

Required

Calculate the bonus for the year, in each of the following situations:

a. Sherif gets a bonus of 20 percent of partnership income before distributions.

b. Rafik gets a bonus of 20 percent of partnership income after salaries and interest.

c. Sherif gets a bonus of 20 percent of partnership income after salaries, interest, and his bonus.