Cody Paulson and Hannah OBrien formed a partnership, dividing income as follows: 1. Annual salary allowance to

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Cody Paulson and Hannah O’Brien formed a partnership, dividing income as follows:

1. Annual salary allowance to Paulson of $26,000.

2. Interest of 5% on each partner’s capital balance on January 1.

3. Any remaining net income divided to Paulson and O’Brien, 2:1.

Paulson and O’Brien had $50,000 and $120,000, respectively, in their January 1 capital balances. Net income for the year was $33,000.

How much net income should be distributed to Paulson?

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Financial Accounting

ISBN: 978-1133952428

12th Edition

Authors: Warren, Reeve, Duchac

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Question Posted: May 07, 2012 06:31 AM

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Cody Paulson and Hannah OBrien formed a partnership, dividing income as follows: 1. Annual salary allowance to

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Distributed to Paulson and OBrien Paulson OBrien Total Annual salary 26000 x 26000 ...View the full answer

Financial Accounting

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