Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The partnership of Lovett and King allocates profits based on capital balances and service. Lovett has a capital balance of $50,000, and King has a

The partnership of Lovett and King allocates profits based on capital balances and service. Lovett has a capital balance of $50,000, and King has a capital balance of $35,000. King devotes more time by acting as operations manager of the business. The first allocations of profits are based on capital balances where each partner receives 8% of his capital balance. The next $50,000 is based on service. King receives $30,000 of this amount and Lovett receives $20,000. Any additional profit or loss is allocated equally. If the partnership earns $90,000, how much will be allocated to King?

Step by Step Solution

3.45 Rating (152 Votes )

There are 3 Steps involved in it

Step: 1

Heres how to calculate how much will be allocated to King Step 1 Ca... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting for Decision Making and Control

Authors: Jerold Zimmerman

8th edition

78025745, 978-0078025747

More Books

Students also viewed these Accounting questions

Question

What does a polygraph measure and why are its results questionable?

Answered: 1 week ago