Problem

Profit allocation based on multiple factors. Moore, Probst, and Tanski formed a partne...

Profit allocation based on multiple factors. Moore, Probst, and Tanski formed a partnership whose profit and loss agreement contained the following provisions:

If the weighted-average capital is negative, interest at 10% will be charged against the partner’s profit allocation. All provisions of the profit and loss agreement should be satisfied, and any resulting deficiency should be allocated based on the profit and loss percentages.

Assuming a 2011 income of $168,000, determine how the 2011 income should be allocated to the partners.

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Solutions For Problems in Chapter 13