Question - Dividing Partnership Income
Candace Hassell and Abby Lawson formed a partnership, investing $374,400 and $249,600, respectively.
Determine their participation in the year's net income of $408,000, under each of the following independent assumptions.
a. No agreement concerning division of net income.
b. Divided in the ratio of original capital investment.
c. Interest at the rate of 12% allowed on original investments and the remainder divided in the ratio of 2:3.
d. Salary allowances of $98,000 and $136,000, respectively, and the balance divided equally.
e. Allowance of interest at the rate of 12% on original investments, salary allowances of $98,000 and $136,000, respectively, and the remainder divided equally.