Question

The partnership agreement of Jones, King, and Lane provides for the annual allocation of the business’s profit or loss in the following sequence:
• Jones, the managing partner, receives a bonus equal to 20 percent of the business’s profit.
• Each partner receives 15 percent interest on average capital investment.
• Any residual profit or loss is divided equally.
The average capital investments for 2011 were as follows:
Jones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100,000
King . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000
Lane . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000
Purkerson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $60,000
Smith . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000
Traynor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
How much of the $90,000 partnership profit for 2011 should be assigned to each partner?



$1.99
Sales3
Views276
Comments0
  • CreatedOctober 04, 2014
  • Files Included
Post your question
5000