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Problem 14-21 (LO 14-6) The partnership agreement of Jones, King, and Lane provides for the annual allocation of the business's profit or loss in the
Problem 14-21 (LO 14-6)
The partnership agreement of Jones, King, and Lane provides for the annual allocation of the business's profit or loss in the following sequence: |
Jones, the managing partner, receives a bonus equal to 20 percent of the businesss profit. | |
Each partner receives 11 percent interest on average capital investment. | |
Any residual profit or loss is divided equally. |
The average capital investments for 2015 were as follows: |
Jones | $ | 195,000 |
King | 390,000 | |
Lane | 585,000 | |
How much of the $90,000 partnership profit for 2015 should be assigned to each partner? |
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