Stephanie Barnes and Layla Taylor formed a partnership , Design Pros Imaging , last May Each person contributed assets to the business and both partners work full-time in the business. The business made a profit in the first year, which ended Dec. 31, but Layla and Stephanie are still discussing how to divide the net income equitably . The following table shows some options that their accountant worked up.

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Partner Option Taylor Barnes A $28,320 $42,480 B $47,200 $23,600 e C. $6,660 $9,300 32,904 21,936 $39,564 $31,236 D $32,000 $28,000 6,660 9,300 -1,290 -3,870 $37,370 $33,430 E. $32,000 $28,000 1,620 4,590 4,590 $36,590 $34,210 F. $35,400 $35,400 $39,564 $31,236 D. $32,000 $28,000 6,660 9,300 -1,290 -3,870 $37,370 $33,430 E. $32,000 $28,000 1,620 4,590 4,590 $36,590 $34,210 F. $35,400 $35,400 G. $6,660 $9,300 10,620 11,055 33 165 $28,335 $42,465 Dividing Partnership Income Unfortunately, the accountant's notes about each option have been lost Stephanie remembers that the accountant proposed paying 4% interest yearly on each partner's capital investment at the beginning of the year Layla asked the accountant to include at least one bonus option. The accountant used last year's results to show how the net income would have been divided under each option Taylor $166,500 $32,000 Barnes $232,500 1 What is each partner's capital investment? 2. What is each partner's proposed salary amount? $28,000 Points 14/4 Option 3. What was the net income for Design Pros Imaging last year? $70,800 4 Which option shows how the net income will be split if the partners do not reach an agreement? 5. In Option D what do the negative amounts represent? Excess of allowances over Income. 6 What is the last item in Option that is divided between the partners? Remaining net income. Points 4/4 Feedback Another designer Chad Mineart joined the partnership on January 1, after all assets were adjusted to their market values He shoping to work in the business next year. The jumal entries to record tus admission follow MAGES JOURNAL ACCOUNTING EQUATION POST RET DESCRIPTION DEBIT CREDIT ASSETS LILITIES FOUITY 16,650.00 DATE Lan 1 Layla Taylor, Capital Stephanie Bares, Capital Oud Minat, Capital 54,875.00 51.525.000 1 Cash 45,000.00 45.000.00 Chad Mineant, Capital 1. How was Chad admitted to the partnership? Check all that apply 1. How was Chad mitted to the partnership? Check out that apply Participation through negotiation Receipt of partner equity Contribution of service and investment Purchase from the existing partners Income redistribution to partner Points 2 what was the sales price at the equity that Chad purchased? cannot be determined. V 1 Assame that Layla and Stephanie have decided to adopt Option D on the Design Pros Imaging panel. They are wondering how the division of net income under Option will change with the new partner Assume that income is the same as the poor year. Chad will not have a salary allowance the first year, but any remaining net income will be shared equally armonig the partners. Using last year's data as an example, extend Option D to allow for Chads participation. What would Chad's share of the net income be? S5360 X Points 1/2