Two partners Alexis and Gill are trying to draft their partnership agreement and are wondering which method for splitting their new partnerships income makes the most sense. 

The following breakdown their planned asset, liability, salary expectations planned share spit: 

 

 Required: 

Alex and Gill want to know how$145,000in profit will be allocated based on the following methods:

i. Based on given Profit/Loss Ratio

ii) Based on given Profit/Loss Ratio 

iii) If no salary amounts were included, but instead partners take 30% interest allowance on Net Original Investment and the remainder is split 50/50. 

iv) If no partnership agreement is entered 

v) If interest allowance of15% and Salary Allowance at 100% and the rest according to Profit Loss Ratio

Transcribed Image Text:

5 3 9 0 1 2 3 4 The following breakdown their planned asset, liability, salary expectations planned share split: Alexis Cash Equipment Liabilities Salary Profit/Loss Ratio 20,000 45,000 3,500 20,000 35% Gill 12,000 10,000 40,000 65% 5 3 9 0 1 2 3 4 The following breakdown their planned asset, liability, salary expectations planned share split: Alexis Cash Equipment Liabilities Salary Profit/Loss Ratio 20,000 45,000 3,500 20,000 35% Gill 12,000 10,000 40,000 65%

Answer rating: 100% (QA)

Based on given ProfitLoss Ratio 35 of 145000 50750 for Alexis 65 of 145000 94250 for Gill If no sala... View the full answer