Applying the interest allowance method, compute Taylor and Timmy's share of net income if Taylor invested $200,000 and Timmy invested $800,000 at a 6% interest rate, with the remainder to be divided equally. Net income was $75,000.

Question 18 options:

a)

Taylor $15,000; Timmy $60,000

b)

Taylor $37,500; Timmy $37,500

c)

Taylor $19,500; Timmy $55,500

d)

none of the above