Two recent business school graduates, Alexander and Andrea, started a shop called Infinitum Exports on 1 January 2004. Their partnership agreement stipulated that each would receive 10 per cent interest on capital contributed and that they would share equally any net income in excess of this 10 per cent payment. Alexander had contributed EUR 50,000 and Andrea EUR 70,000. They also agreed that Alexander, who could devote only part time to the venture, would receive a salary of EUR 15,000 while Andrea would receive EUR 40,000. Net income for the first year (after deducting both partners' salaries) was EUR 66,000.
(a) What was each partner's total income (including salaries) from the enterprise?
(b) Analyse the impact of the transactions just mentioned, on the accounting equation.