Question

33. Follows on the next page. This question has two parts. Prepare two schedules showing all of your work. You should determine the total amount each partner is to receive of profits or losses for each scenario. Alexis and Bruce are partners in a business Alexis $45,000 Bruce $55,000 They have original capital balances of | They agree to share profits and losses as follows: As Salaries $34,000 Interest on Original Capital Balances 10% Remaining after salaries and interest 60% Calculate each partners total share of profits and losses a) net income of $100,000 b) net income of $40,000 $50,000 10% 40%

Answer 1

	Alexis	Bruce
Original capital balances	45,000	55,000
Salaries	34,000	50,000
Interest on original capital	10%	10%
Remaning after salaries and interest	60%	40%
Particulars	Scenerio 1	Scenerio 2
Net income	1,00,000	40,000
Less: salaries
Alexis	34,000	34,000
Bruce	50,000	50,000
Less: Interest
Alexis	4,500	4,500
	(45000*10%)
Bruce	5,500	5,500
	(55000*10%)
Income/(loss) after Salaries and interest to partners	6,000	-54,000
Profit sharing ratio
Alexis :60%	3,600	-32,400
Bruce: 40%	2,400	-21,600