Question

Nalle. Clinton and Dole had capital balances of $120,000 and $180,000 respectively at the beginning of the current fiscal year. The articles of partnership provide for salary allowances of $18,000 and $20,000 respectively, an allowance of interest at 12% on the capital balances at the beginning of the year, with the remaining net income divided equally. Net income for the current year was (a) $100,000 (b) $50,000

Answer 1

A B C D Clinton Dole Total 18000 144001 13000 20000 216001 13000 54600 38000 36000 26000 100000 45400 1 a) 2 Particulars 3 Division of net income: 4 Salary allowance 5 Interest allowance 6 Remaining income 7 Net Income 8 9 b) 10 Particulars 11 Division of Net income: 12 Salary allowance 13 Interest allowance 14 Total 15 Excess of allowance over net income 16 Net Income Clinton Dole Total 180001 14400 32400 -12000 20400 20000 216000 41600 -12000 29600 38000 36000 740001 -24000 50000

C Dole Total =B4+C4 20000 21600 13000 54600 =B5+C5 =B6+C6 =B7+07 A B 1 a) 2 Particulars Clinton 3 Division of net income: 4 Salary allowance 18000 5 Interest allowance 14400 6 Remaining income 13000 7 Net Income 45400 8 9 b) 10 Particulars Clinton 11 Division of Net income: 12 Salary allowance 18000 13 Interest allowance 14400 14 Total 32400 15 Excess of allowance over net income -12000 16 Net Income 20400 Dole Total 20000 21600 41600 -12000 29600 =B12+C12 =B13+C13 =B14+C14 =B15+C15 =B16+C16