Jensen and Stafford began a partnership by investing $160,000 and $200,000, respectively. They agreed to share net incomes and losses by allowing yearly salary allowances of $150,000 to Jensen and $75,000 to Stafford, 20% interest allowances on their investments, and the balance 3:2.
1. Determine each partner’s share if the first-year net income was $420,000.
2. Independent of (1), determine each partner’s share if the first-year net loss was $95,000.