Division of Income?Multiple Bases
The partnership agreement of Angela and Dawn has the following provisions:
1. The partners are to earn 10 percent on the average capital.
2. Angela and Dawn are to earn salaries of $25,000 and $15,000, respectively.
3. Any remaining income or loss is to be divided between Angela and Dawn using a 70:30 ratio.
Angela's average capital is $50,000 and Dawn's is $30,000.
Required
Prepare an income distribution schedule assuming the income of the partnership is (a) $80,000 and (b) $20,000. If no partnership agreement exists, what does the UPA 1997 prescribe as the profit or loss distribution percentages?
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