Question

Dividing Partnership Net Income Required: Steve Conyers and Chelsy Boxer formed a partnership, dividing income as follows: 1. Annual salary allowance to Conyers of $156,600 2. Interest of 5% on each partner's capital balance on January 1. 3. Any remaining net income divided to Conyers and Boxer, 1:2. Conyers and Boxer had $78,000 and $93,000, respectively, in their January 1 capital balances. Net income for the year was $270,000. How much is distributed to Conyers and Boxer? Note: Compute partnership share. Conyers: $ Boxer: $

Answer 1

1 Ans: 2 Compute partnership share 3 Particulars Amount 4 Conyers $195,450 5 Boxer $74,550 mowance 7 Workings: 8 Particulars 9 Salary allowance 10 Interest on Capital (5%) 11 Total appropriations 12 Remaining net income (1:2) 13 Total Conyers Boxer Total $156,600 SO $156,600 $3,900 $4,650 $8.550 $160,500 $4,650 $165,150 $34,950 $69,900 $104,850 $195,450 $74,550 $270,000

1 Ans: Compute partnership share Particulars Amount Conyers =B13 5 Boxer =C13 7 Workings: 8 Particulars Convers Boxer Total 9 Salary allowance 156600 =SUMB9:C9) 10 Interest on Capital (5%) =78000*5% =93000*5% =SUMB10:C10) 11 Total appropriations =SUM(B9:B10) =SUM(C9:C10) =SUM(D9-D10) 12 Remaining net income (1-2) =(270000-D11)/3)*1 =((270000-D11)/3)*2 =SUM(B12:C12) 13 Total =B11+B12 =C11+C12 =D12+D11

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273 Tyler $54,000 $43,200 $52,650 $47,500 $46,150 Piper $54,000 $64.800 $55,350 $60,500 $61,850 Particulars a Net income (1:1) Net income (4:6) (refer working b) Interest allowance Remaining income (2-2) Net income Salary allowance Remaining income (1:1) Net income Interest allowance Salary allowance Remaining income (1:1) Net income Tyler $54,000 $43,200 $5,400 $47.250 $52,650 $34.000 $13,500 S47,500 $5.400 $34.000 $6.750 $46,150 Piper Total $54.000 $108.000 $64.800 $108,000 $8,100 $13,500 $47,250 $94,500 $55,350 $108,000 $47,000 $81,000 $13,500 $27.000 $60,500 $108,000 $8.100 $13,500 $47,000 $81,000 $6,750 $13,500 $61,850 $108.000 Working for b) 108000 162000 270000 Threfore, 4:6 0.4 0.6

I 2) Tvler T (a) =L27 (6) =L28 (c) =L31 (a) =L34 (e) =L38 Piper =M27 =M28 =M31 =M34 =M38 Particulars Tyler Piper Total Net income (1:1) =N27/2 =N27/2 108000 Net income (4:6) (refer working b) = N28/10*4 I=(N28/10)*6 108000 Interest allowance =108000*5% =162000*5% =SUM(L29-M29) Remaining income (2-2) =(N30/4)*2 I=(N30/4)*2 =N28-N29 Net income =SUM(L29:L30) I=SUM(M29:M30) I=SUM(N29:N30) Salary allowance 34000 47000 =SUM(L32:M32) Remaining income (1:1) I=(N33/2)*1 =(N33/2)*1 =N31-N32 Net income I=SUM(L32:L33) I=SUMM32:M33) =SUM(L34:M34) Interest allowance =L29 =M29 =SUM(L35-M35) Salary allowance =L32 =M32 =SUM(L36:M36) Remaining income (1:1) =(N37/2*1) =(N37/2)*1 =N34-(N35+N36) Net income =SUM(L35:L37) I=SUMM35:M37), =SUM(L38:M38) Working for b) 108000 =L42/L44 162000 =L43/L44 =SUM(L42:L43) =SUM(M42:M43) Threfore, 4:6

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pg Tyler $145,000 $217,500 $116,000 $140,500 $138,880 Piper $145,000 $72,500 $174,000 $149,500 $151,120 Particulars a Net income (1:1) b Net income (3:1) (refer working b) Interest allowance Remaining income (2:3) Net income Salary allowance Remaining income (1:1) Net income Interest allowance Salary allowance Remaining income (1:1) Net income Tyler $145,000 $217,500 $6,480 $109,520 $116,000 $36.000 $104,500 $140,500 $6,480 $36,000 $96,400 $138.880 Piper Total $145,000 $290,000 $72,500 $290,000 $9.720 $16,200 $164.280 $273.800 $174,000 S290,000 $45,000 $81,000 $104,500 $209,000 $149,500 $290,000 $9.720 $16,200 $45,000 $81,000 $96,400 $192.800 $151,120 S290,000 Working for b) 202500 67500 270000 Threfore, 3:1 0.75 0.25

pg R Tyler (a) =S27 (b) =S28 (c) =S31 (a) = 34 (e) =S38 Piper =T27 =128 =T31 =T34 =T38 Particulars Tyler Piper Total Net income (1:1) =U27/2 =U27/2 290000 Net income (3:1) (refer working b) =U28/4*3 =U28/4+1 290000 Interest allowance =108000*6% =162000*6% =SUM(S29-T29) Remaining income (2:3) I=(U30/5)*2 =(U30/5)3 =U28-29 Net income I=SUM(S29:S30) I=SUM(T29:T30) =SUMU29:U30) Salary allowance 36000 45000 =SUM(S32:132) Remaining income (1:1) =(U33/2)*1 =(U33/2)*1 =U31-U32 Net income =SUM(S32:S33) =SUM(T32:133) =SUM(S34:134) Interest allowance =T29 =SUM(S35:135) Salary allowance =S32 =T32 =SUM(S36:136) Remaining income (1:1) =(U37/2*1) =(U37/2)*1 =U34-(U35+U36) Net income I=SUM(S35:S37) =SUM(T35:137) I=SUM(S38:138) =S29 Working for b) 202500 =S42/S44 67500 =S43/S44 =SUM(S42:S43) =SUM(T42:T43) Threfore, 3:1