Question
Topic: Partnership income allocation 3 Jing, Kang, and Liang have interests in the JKL Partnership. Partnership income for the year is$350,000. The partnership agreement specifies
Topic: Partnership income allocation 3
Jing, Kang, and Liang have interests in the JKL Partnership. Partnership income for the year is$350,000. The partnership agreement specifies that partnership income is to be allocated as follows: salaries of $100,000 to Jing, $50,000 to Kang, and $50,000 to Liang; a bonus of 20% of partnership income, after deducting salaries and bonus, to Kang, and the remainder allocated equally between the three partners. Kang's bonus for the year is:
a.$37,500
b.$30,000
c.$25,000
d.$27,500
ANS:c
B = Bonus to Kang
B = ($350,000 $200,000 B) x 20%
B = $30,000 0.2BB = $25,000
Can you please explain how the answer was reached. I don't understand B = $30,000 0.2BB = $25,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started