Question

Dividing Partnership Net Income Required: Steve Prince and Chelsy Boxer formed a partnership, dividing income as follows: 1. Annual salary allowance to Boxer of $95,760. 2. Interest of 7% on each partner's capital balance on January 1. 3. Any remaining net income divided to Prince and Boxer, 1:2. Prince and Boxer had $57,000 and $111,000, respectively, in their January 1 capital balances. Net income for the year was $171,000. How much is distributed to Prince and Boxer? Note: Compute partnership share. Prince: $ Boxer: $

Dividing Partnership Net Income

Required:

Steve Prince and Chelsy Boxer formed a partnership, dividing income as follows:

1. Annual salary allowance to Boxer of $95,760.
2. Interest of 7% on each partner's capital balance on January 1.
3. Any remaining net income divided to Prince and Boxer, 1:2.

Prince and Boxer had $57,000 and $111,000, respectively, in their January 1 capital balances. Net income for the year was $171,000. How much is distributed to Prince and Boxer?

Note: Compute partnership share.
Prince: $
Boxer: $

Answer 1

Allocation of partnership Income Prince Boxer Total Net Income (loss) 171000 Salary allowances 95760 957600 Balance of income (loss) 752401 Interest allowance 3990 7770 11760 Balance of income (loss) 63480 Balance allocated (1:2) 21160 4232063480 Balance of income (loss) 0 Share of the partners 25150 145850