Question

Why is my answer wrong? How should it be done?

Dividing Partnership Net Income Required: Steve Conyers and Chelsy Bernard formed a partnership, dividing income as follows: 1. Annual salary allowance to Conyers of $144,480. 2. Interest of 6% on each partner's capital balance on January 1. 3. Any remaining net income divided to Conyers and Bernard, 1:2. Conyers and Bernard had $87,000 and $99,000, respectively, in their January 1 capital balances. Net income for the year was $258,000. How much is distributed to Conyers and Bernard? Note: Compute partnership share. Conyers: $ 200,880 X Bernard: $ 57,120 X Feedback Check My Work Set up a column for each partner and a total column. The amount of net income that should be distributed to each partner should include: the partner's salary allowance, the interest on the partner's capital balance, and any remaining income divided based on the partnership agreement. If the net income is less than the total of the salary and interest allowances, then the remaining net income to divide is a negative amount, as though it were a net loss.

EDIT: I think I understand where I went wrong, but I still want to make sure I'm correct.

For the remaining income, I get a total of $102,360. I missed the ratio and thought it was divided equally, so should it be:

Conyers $34,120 ($102,360 x 1/3)

Bernard $68,240 (102,360 x 2/3)

Are the calculations above correct?

Answer 1

CALCULATE NET INCOME DISTRIBUTION :
	Conyers	Chelsy
Salary	144,480	0
Interest on capital	99000*6%=5940	87000*6%=5220
Remaining amount distribution	102360*1/3=34120	102360*2/3=68240
(258000-144480-5940-5220)=102360
Total distribution	184,540	73,460