Problem
Arlene, Peter and John formed a limited liability partnership in 2019. In 2020, the beginning capital balance of each partner was $29,000, $43,500 and $72,500 respectively. During 2020, the company earned a net income of $51,000, and Arlene withdrew $26,000 while Peter and John withdrew $40,000 and $39,000 respectively
Calculate the amount of net income each partner will receive based on the following independent scenarios.
i. The earnings are divided equally.
ii. Arlene receives 27%, Peter receives 44%, and John receives 29% of the earnings.
iii. The earnings are divided based on the partner's capital balance at the beginning of the year.