Question

Bock Show Me How Calculator Printem 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 $295.000 under each of the following independent assumptions: a. No agreement concerning division of net income. b. Divided in the ratio of original capital investment. C. Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:3 d. Salary allowances of $40,000 and $45,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 5% on original investments, salary allowances of $40,000 and $45,000, respectively, and the remainder divided equally Hawes Albright (a) 140,000 X 140,000 X (b) $112,000 X $ 112,000 X $ 112,000 X 112,000 $ 137,500 X 137,500 x 137,500 137,500 x (e) Set up a column for each partner and a total column a. Determine the distribution of income and losses in the absence of a partnership agreement. b. Use the ratio of the partner's original capital investment to distribute the net income le the c ar and the internet wire nice the mininn innme hand on the start (Previous Next
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Answer 1

	Hawes	Albright
a	$147500	$147500
b	$118000	$177000
c	$118000	$177000
d	$145000	$150000
e	$143500	$151500

Part A

In case of no agreement, profit and loss should be distributed equally

295000/2 = 147500

Part B

Ratio of original capital ratio =120000:180000 = 2:3

Hawes = 295000*2/5 = 118000

Albright = 295000*3/5 = 177000

Part C

	Hawes	Albright
Interest (5%)	6000	9000
Remaining 280000(295000-6000-9000) in 2:3	112000	168000
Net income	118000	177000

Part D

	Hawes	Albright
Salary allowance	40000	45000
Remaining 210000(295000-40000-45000) in 1:1	105000	105000
Net income	145000	150000

Part E

	Hawes	Albright
Interest (5%)	6000	9000
Salary allowance	40000	45000
Remaining 195000(295000-6000-9000-40000-45000) in 1:1	97500	97500
Net income	143500	151500