Dallas and Weiss began a partnership by investing $115,000 and $135,000, respectively. During its first year, the partnership recorded net income of $394,000.
Prepare calculations showing how the income should be allocated to the partners under each of the following plans for sharing net incomes and losses:
a. The partners failed to agree on a method of sharing income.
b. The partners agreed to share incomes and losses in proportion to their initial investments.
c. The partners agreed to share income by allowing a $140,000 per year salary allowance to Dallas, a $70,000 per year salary allowance to Weiss, 25% interest on their initial investments, and the balance equally.