Partnership_Income distribution

 

Question No. 1

JenniJennifer Wyatt and Megan Truett formed a partnership, investing $330,000 and $110,000, respectively.?

Determine their participation in the year’s net income of $420,000 under each of the following independent assumptions:

a)    a) No agreement concerning division of net income.

b)    b)  Divided in the ratio of original capital investment.

c)     c) Interest at the rate of 8% allowed on original investments and the remainder divided in the ratio of 2:3.

d)     d) Salary allowances of $50,000 and $70,000, respectively, and the balance divided equally.

e)      e)  
Allowance of interest at the rate of 8% on original investments, salary allowances of $50,000 and $70,000, respectively, and the remainder divided equally.

   

Ques. 2

Determine the income participation of Wyatt and Megan, according to each of the five assumptions as to income division listed in question1, if the year’s net income is $160,000.