Question
Phox and Ranch have decided to form a partnership. They are in the process of agreeing on how the profits/losses will be divided. Assume that
Phox and Ranch have decided to form a partnership. They are in the process of agreeing on how the profits/losses will be divided. Assume that the company is anticipating net income of $80,000 for the first time period. Determine Phox's share of the $80,000 if the partners agree on an interest allowance of 10% on the original investments (Phox invested $20,000 and Ranch invested $30,000), salary allowances of $22,000 to Phox and $33,000 to Ranch, and the remainder equally.
| Phox | Ranch | Total |
Interest Allowances |
|
|
|
Salary Allowances | 22,000 | 33,000 | 55,000 |
Remainder 1:1 | _____ | ______ | ______ |
Totals | ? |
| 80,000 |
A. $20,000
B.$33,000
C.$34,000
D. $46,000
I don't undersand this example, Someone please explain it to me
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