Karen Rhea and Wayne Sellevaeg decided to form a partnership on July 1, 20-1. Rhea invested $100,000

Question:

Karen Rhea and Wayne Sellevaeg decided to form a partnership on July 1, 20-1. Rhea invested $100,000 and Sellevaeg invested $50,000. For the fiscal year ended June 30, 20-2, a net income of $90,000 was earned. Determine the amount of net income that Rhea and Sellevaeg would receive under each of the following independent assumptions:

1. There is no agreement concerning the distribution of net income.

2. Each partner is to receive 10% interest on their original investment. The remaining net income is to be divided equally.

3. Rhea and Sellevaeg are to receive a salary allowance of $30,000 and $40,000, respectively. The remaining net income is to be divided equally.

4. Each partner is to receive 10% interest on their original investment. Rhea and Sellevaeg are to receive a salary allowance of $30,000 and $40,000, respectively. The remaining net income is to be divided as follows: Rhea, 40% and Sellevaeg, 60%.

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...