Dylan Howell and Demond Nickles have decided to form a partnership. They have agreed that Howell is
Question:
a. Equal division.
b. In the ratio of original investments.
c. In the ratio of time devoted to the business.
d. Interest of 10% on original investments and the remainder in the ratio of 3:2.
e. Interest of 10% on original investments, salary allowances of $38,000 to Howell and $19,000 to Nickles, and the remainder equally.
f. Plan (e), except that Howell is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances.
Instructions
For each plan, determine the division of the net income under each of the following assumptions:
(1) Net income of $420,000 and (2) net income of $150,000. Present the data in tabular form, using the following columnar headings:
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Accounting
ISBN: 978-1285743615
26th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
Question Posted: