During the first year, the Bob and Kim partnership in SE 2 earned an income of $5,000.

Question:

During the first year, the Bob and Kim partnership in SE 2 earned an income of $5,000. Assume the partners agreed to share income and losses by figuring interest on the beginning capital balances at 10 percent, allowing a salary of $6,000 to Bob, and dividing the reminder equally. How much income (or loss) should be transferred to each Capital account?

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...