Ramer and Knox began a partnership by investing $78,000 and $108,000, respectively. The partners agreed to share

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Question:

Ramer and Knox began a partnership by investing $78,000 and $108,000, respectively. The partners agreed to share net income and loss by giving annual salary allowances of $59,000 to Ramer and $47,200 to Knox, 10% interest allowances on their investments, and any remaining balance shared equally.

Required:

1. Determine each partner's share given a first-year net income of $116.800.

2. Determine each partner's share given a first-year net loss of $34,800.