Larson and Amos have decided to form a partnership. They have agreed that Larson is to invest $150,000 and that Amos is to invest $50,000. Larson is to devote one-half time to the business, and Amos is to devote full time. The following plans for the division of income are being considered:

a. Equal division.

b. In the ratio of original investments.

c. In the ratio of time devoted to the business.

d. Interest of 12% on original investments and the remainder equally.

e. Interest of 12% on original investments, salary allowances of $32,000 to Larson and $64,000 to Amos and the remainder equally.

f. Plan (e), except that Amos is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the salary allowances.

Instructions

For each plan, determine the division of the net income under each of the following assumptions: (1) net income of $105,000 and (2) net income of $180,000. Present the data in tabular form, using the following column headings:

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$105,000 $180,000 Plan Amos Larson Larson Amos