Dividing Partnership Income
Candace Hassell and Abby Lawson formed a partnership, investing $417,600 and $278,400, respectively.
Determine their participation in the year's net income of $240,000 under each of the following independent assumptions:
No agreement concerning division of net income.
Divided in the ratio of original capital investment.
Interest at the rate of 12% allowed on original investments and the remainder divided in the ratio of 2:3.
Salary allowances of $111,000 and $153,000, respectively, and the balance divided equally.
Allowance of interest at the rate of 12% on original investments, salary allowances of $111,000 and $153,000, respectively, and the remainder divided equally.