Income distribution: Different arrangements.
Frank, Gatti, and Hogan recently invested 530,000 each and formed the Apex partnership.
During the first year of operation, the business generated a net income of $39,000.
Determine the proper division of income among the partners for the following independent cases:
a. Income is divided on the basis of a ratio of the beginning capital investments.
b. Partners are allowed 12% interest on their investments; the remaining profits and losses are allocated on a 6:1:3 basis.
c. Frank and Hogan each receive salary allowances of $24,000 per year; the remaining profits and losses are shared equally.