Question: The partnership agreement of Jones King and Lane provides for

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?


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  • CreatedOctober 04, 2014
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