Ramer and Knox began a partnership by investing $60,000 and $90,000, respectively. During its first year, the partnership earned $185,000. Prepare calculations showing how the $185,000 income is allocated under each separate plan for sharing income and loss. 1. The partners did not agree on a plan, and therefore share income equally.

. The partners agreed to share income and loss in proportion to their initial investments. Net income is $185,000. (Do not round intermediate calculations.)

Fraction to Allocate Ramer	Ramer's Share of Income	Fraction to Allocate Knox	Knox's Share of Income	Total Income Allocated
$60,000/$150,000		$90,000/$150,000		$0

The partners agreed to share income by giving a $55,000 per year salary allowance to Ramer, a $45,000 per year salary allowance to Knox, 15% interest on their initial capital investments, and the remaining balance shared equally. Net income is $185,000. (Enter all allowances as positive values. Enter losses as negative values.)

	Ramer	Knox	Total
Net Income
Salary allowances			0
Interest allowances			0
Total salary and interest
Balance of income
Balance allocated equally			0
Balance of income
Shares of the partners	$0	$0