Homework Answers
Bonus is calculated as follows:
Bonus = 10% (Net income – Bonus)
Bonus = 10% ($198,000 – Bonus)
Bonus = $19,800 – 10% of Bonus
Bonus x 110% = $19800
Bonus = $18000
Remaining Profit - 198000 - 18000 = $180000
Arnold's Share 40% = $ 72000
Beverly Share 40% + Bonus = $72000 + $18000 = $90000
Carolyn Share 20% = $36000
3) Dan's Capital Investment
| Amount Invested | No of Months | Weighted Avg Balance |
| 200000 | 6 | 1200000 |
| 240000 | 3 | 720000 |
| 200000 | 3 | 600000 |
| 12 | 2520000 | |
| Average Capital | 210000 |
Hen's average Capital = 160000-18000 = 142000
Bai's Average Capital = 150000 - 18000 = 132000
| Dan | Hen | Bai | ||
| Net Income | 28000 | |||
| Salary Allowance | -42000 | 0 | 18000 | 24000 |
| Interest on Capital | -48400 | 21000 | 14200 | 13200 |
| Remainder to be divided | -62400 | |||
| Divided Equally | 62400 | -20800 | -20800 | -20800 |
| Net Allocation | 200 | 11400 | 16400 |
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