Solution:
Division of Income | $300,000 | ||
S. No | Particulars | Hawes | Albright |
a | No agreement concerning division of net income (1:1) | $150,000.00 | $150,000.00 |
b | Divided in the ratio of original capital investment (2:3) | $120,000.00 | $180,000.00 |
c | Interest of 6% on original investment and remainder in ratio 2:3 | ||
Interest
Amount (Opening Capital * 6%) Hawes (112000*6%) Albright (168000*6%) |
$6,720.00 | $10,080.00 | |
Distribution of remaining income (2:3) Remainder income= ($300,000 - $6,720 - $10,080) = 283,200 |
$113,280.00 | $169,920.00 | |
Total Share of Income (Interest + Remaining Distribution) | $120,000 | $180,000 | |
d | Salary allowance and balance divided equally | ||
Salary allowances to partner | $38,000.00 | $50,000.00 | |
Distribution of remaining income (1:1) Remainder income= ($300,000 - $38,000 - $50,000) = 212,000 |
$106,000.00 | $106,000.00 | |
Total Share of Income | $144,000 | $156,000 | |
e | Interest of 6% on original investment, Salary Allowances and remainder in the ratio of 1:1 | ||
Interest
Amount (Opening Capital * 6%) Hawes (112000*6%) Albright (168000*6%) |
$6,720.00 | $10,080.00 | |
Salary Allowance | $38,000.00 | $50,000.00 | |
Distribution of remaining income (1:1) | $97,600.00 | $97,600.00 | |
Total Share of Income (Interest + Salary + Remaining Distribution) | $142,320.00 | $157,680.00 |
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