Question

1. 2. Dividing Partnership Income

   Tyler Hawes and Piper Albright formed a partnership, investing $120,000 and $180,000, respectively.

   Determine their participation in the year's net income of $110,000 under each of the following independent assumptions:

2. No agreement concerning division of net income.
3. Divided in the ratio of original capital investment.
4. Interest at the rate of 6% allowed on original investments and the remainder divided in the ratio of 2:2.
5. Salary allowances of $40,000 and $46,000, respectively, and the balance divided equally.
6. Allowance of interest at the rate of 6% on original investments, salary allowances of $40,000 and $46,000, respectively, and the remainder divided equally.

7. 	Hawes	Albright
   (a)	$	$
   (b)	$	$
   (c)	$	$
   (d)	$	$
   (e)	$	$

Answer 1

B с D E Hawes Albright Total 55000 55000 110000 Hawes Albright Total 44000 66000 110000 А 1 Part A: 2 3 Particulars 4 Net Income (1:1) 5 6 Part B : 7 8 Particulars 9 Net Income (2:3) 10 11 Part C: 12 13 Particulars 14 Net Income 15 Interest Allowance 16 Balance of income 17 Balance allocated in ratio of 2:2 18 Balance of income 19 Total Net Income Allocated 20 Hawes Albright Total 110000 18000 7200 10800 92000 46000 46000 53200 56800

A B с D E 24 25 Part D: Hawes Albright Total 110000 86000 40000 46000 26 27 Particulars 28 Net Income 29 Salaries Allowance 30 Balance of Income 31 Balance Allocated in ratio of 1:1 32 Balance of Income (loss) 33 Total Net Income Allocated 24000 12000 12000 52000 58000 34

36 Hawes Albright Total 7200 10800 37 Part E: 38 39 Particulars 40 Net Income 41 Interest Allowance 42 Balance Of Income 43 Salaries Allowance 44 Balance of income (loss) 45 Balance Allocated in Ratio 1:1 46 Balance of Income (loss) 47 Total Net Income Allocated 110000 18000 92000 86000 6000 40000 46000 3000 3000 50200 59800