PROBLEM

The PQ partnership has the following plan for the distribution of partnership net income (loss):

	P	Q
Salaries	$60,000	$100,000
Bonus in net income	6%	12%
Interest on average capital balances	7%	7%
Remainder (if positive)	60%	40%
Remainder (if negative)	50%	50%

Required: Calculate the distribution of partnership net income (loss) for each independent situation below (for each situation, assume the average capital balance of P is $140,000 and of Q is $240,000). 1. Partnership net income is $360,000. 2. Partnership net income is $240,000. 3. Partnership net loss is $40,000.