Question
The partnership agreement of Maxwell, Norris, and Otterman provides for the annual allocation of the businesss profit or loss in the following sequence: Maxwell, the
The partnership agreement of Maxwell, Norris, and Otterman provides for the annual allocation of the businesss profit or loss in the following sequence: Maxwell, the managing partner, receives a bonus equal to 30 percent of the businesss profit. Each partner receives 20 percent interest on average capital investment. Any residual profit or loss is divided equally. The average capital investments for 2018 were as follows:
Maxwell $ 50,000
Norris $ 70,000
Otterman $100,000
How much of the $80,000 partnership profit for 2019 should be assigned to each partner?
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